ANKARA: Turkey-Armenia relations at historic opportunity-US official

Feb 28 2009

Turkey-Armenia relations at historic opportunity, says US official

Co-Chair of the Turkish friendship group in the U.S., said that
Turkey-Armenia relations were at a historic turning point.

Saturday, 28 February 2009 11:15

U.S. Congressman Robert Wexler, Co-Chair of the Turkish friendship
group in the U.S. House of Representatives, said Friday that
Turkey-Armenia relations were at a historic turning point, noting that
there was chance for normalization of relations.

Wexler, who visited Ankara and held meetings with Turkish officials
last week, talked about Turkish-Armenian relations at the Foreign
Affairs Committee.

Wexler said it seemed relations between Turkey and Armenia were at a
point of historic opportunity, noting that relations could be
normalized and border gates between Turkey and Armenia could be
opened.

AA

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Energy Company May Be First On Armenian IPO Market

ENERGY COMPANY MAY BE FIRST ON ARMENIAN IPO MARKET

ARKA
Feb 27, 2009

YEREVAN, February 27. /ARKA/. An energy company may be the first on
the Armenian initial public offering (IPO) market, Armen Melikyan,
Director General of NASDAQ OMX Armenia, stated at the forum Capital
Markets in Armenia.

"At present we already have information on the companies taking
steps to enter the IPO market. However, both brokers and issuers
themselves are supposed to provide relevant information. We hope that
the information will be made public before the end of this quarter,
and the first IPO will be announced," he said.

Melikyan reported that one organization is now ready for an IPO and
has got its documents registered.

NASDAQ OMX Armenia is now expecting the company’s announcement of
it’s a share issue.

He added that NASDAQ OMX Armenia planned work at IPO as far back as
last year, but the financial crisis delayed this process.

He reported that the issuers have concerns and fears. As a result
the expected amount of issue has been reduced.

"We want the Armenian public to make investments in the capital market.

However, in talking about IPO we always mean foreign investments. The
crisis will cause reduction in investments. I think that IPOs from
$5mln are realistic now," Melikyan said.

RFE/RL Armenia Report – 02/27/2009

Friday, 27 February, 2009

Armenian Police To Allow March 1 Rally

By Karine Kalantarian and Ruzanna Stepanian

The Armenian police indicated on Friday that they will not try to
disperse thousands of people who are expected to rally on Sunday to mark
the first anniversary of the 2008 post-election clashes in Yerevan.

The main opposition Armenian National Congress (HAK) plans to rally
supporters outside the Matenadaran institute of ancient manuscripts and
then stage a march through the city despite the municipal authorities’
refusal to authorize the protest.

Major-General Alik Sargsian, chief of the national police, made clear
that the police will not enforce the ban. `The police are very calm,’ he
said. `Nothing [bad] is expected on March 1. Our people understand
everything.’

`We too will act like victims. We too suffered casualties, our people
also died on that day,’ Sargsian told a news conference, referring to
the deaths of two police servicemen in the March 1, 2008 clashes with
opposition supporters that barricaded themselves outside the Yerevan
mayor’s office. The violence also left eight civilians dead.

Sargsian said the police will use force only in the event of `any
violation of public order.’ `But we are convinced that people will
calmly gather, pay their respects [to the March 1 victims] and go home,’
he said.

As the police chief spoke to journalists, the HAK issued a statement
urging law-enforcement bodies to work together with the opposition
alliance in making sure that the upcoming rally is peaceful. Levon
Zurabian, a senior HAK representative, said the organizers will take
`unprecedented measures to maintain order during rally’ and warned the
police against taking `provocative actions.’ `We are urging the police
to cooperate, not to create problems, not to provoke the people,’ he
said.

Zurabian claimed that the police have so far avoided such cooperation
and are planning to seriously restrict Yerevan’s transport communication
with the rest of the country to lower attendance at the rally. `The
authorities are terrified that their lies will be exposed,’ Zurabian
told reporters. `They have tried to persuade the public and the
international community in that the [opposition] movement has died out,
that internal stability is restored, and that there is no political
crisis in Armenia.’

The HAK, which is led by former President Levon Ter-Petrosian, holds the
authorities solely responsible for the unprecedented post-election
unrest, saying that they deliberately used lethal force to crush street
protests against alleged vote rigging. The police actions on that day
were also criticized by New York-based Human Rights Watch in an
extensive report issued on Wednesday.

Sargsian, who was appointed as police chief in June 2008, dismissed the
criticism, saying that the police can only be faulted for being too slow
in reacting to the opposition actions on March 1. `I don’t defend police
actions on March 1,’ he said. ` `They may have been inactive at one
point. But the police found themselves in an unpredictable situation and
lost their orientation at that moment, as a result of which we too
became victims. I feel very sorry for that.’

`We will wait until this investigation is over and then have our say as
victims,’ added Sargsian.

(Photolur photo)

Armenian Strife Still An Open Wound One Year On

By Emil Danielyan

The sudden calm in a vast square outside the Yerevan mayor’s office
could hardly be more deceptive on the sunny afternoon of March 1, 2008.
Riot police had just left and thousands of people stood there in silent
anticipation of the unknown. The most bullish of them were busy arming
themselves with whatever they could find and blocking all the approaches
to the area with public transportation and police buses. Hundreds of
other men sat or lay on a nearby lawn dotted with iron bars stuck in the
ground.

The scene, surreal for a traditionally non-violent country like Armenia,
summed up the extent of their fury with the forcible break-up early in
the morning of non-stop demonstrations staged by opposition leader Levon
Ter-Petrosian and his supporters in another major Yerevan square in
protest against the alleged rigging of the February 19 presidential
election. One young man having a rest outside the high-rise municipality
building compared the pre-dawn police operation to the 1988 Armenian
pogrom in Sumgayit, Azerbaijan. `We are all ready to stand here until
the end, until the situation is sorted out according to law,’ he said.

Just hours later, ten people were killed and more than 200 others
injured in vicious clashes between security forces and opposition
protesters. The Armenian political discourse is still dominated by
differing theories of the worst street violence in the country’s
history. The Armenian authorities insist that it was the result of an
opposition conspiracy to illegally seize power in the wake of the
disputed election. Ter-Petrosian and his associates dismiss the coup
allegations and say the government deliberately used lethal force to
crush what they call a popular revolt against vote rigging. Both rival
camps continue to deny any responsibility for the bloodshed. The only
encouraging development in the past year was the formation last November
of a bipartisan fact-finding group tasked with conducting an independent
inquiry into the unrest. The group has since been working behind the
closed doors and has yet to issue any reports.

The events of March 1 marked the bloody end of massive demonstrations
staged by the Armenian opposition following the presidential ballot.
Official election results showed Serzh Sarkisian, the then prime
minister and outgoing President Robert Kocharian’s favored successor,
cruising to a landslide victory with almost 53 percent of the vote.
According to the government-controlled Central Election Commission,
Ter-Petrosian came in in a distant second with 21.5 percent, followed by
two other candidates, Artur Baghdasarian and Vahan Hovannisian.

In their preliminary report, Western vote monitors mostly deployed by
the Organization for Security and Cooperation in Europe (OSCE) concluded
that despite serious problems observed during the counting of ballots,
the election was `administered mostly in line’ with democratic
standards. The report gave a serious boost to the legitimacy of
Sarkisian’s victory, even if the OSCE mission’s final assessment
released in May was more critical of the Armenian authorities’ handling
of the election.

Ter-Petrosian and his broad-based opposition coalition refused to
concede defeat, alleging a plethora of vote irregularities demanding a
re-run of the ballot. The opposition stepped up its pressure on the
authorities on February 21 as it set up a tent camp in Yerevan’s Liberty
Square. Up to 2,000 people led by Ter-Petrosian spent nine consecutive
nights there in freezing temperatures, dancing in circles, setting off
fireworks and warming themselves in tents and around bonfires. Tens of
thousands of other Armenians joined them in daytime to listen to rousing
speeches by opposition leaders and take part in daily marches through
the city center.

Cracks within the ruling regime emerged already on February 22, with
Deputy Prosecutor-General Gagik Jahangirian addressing the rally and
declaring Ter-Petrosian the rightful election winner. This was followed
by the defections to the opposition camp of seven parliament deputies
affiliated with the governing Republican and Prosperous Armenia parties.
Among them was a nephew of General Manvel Grigorian, one of the two
deputy ministers of defense who reportedly pledged allegiance to
Ter-Petrosian. The latter assured the Liberty Square crowd on February
22 that the generals will make sure that the Armenian military is not
used for suppressing the ongoing street protests in the capital. He also
claimed to have secured the backing of the `middle and lower echelons’
of the country’s security apparatus.

Kocharian’s response was not long in coming. Meeting with the top army
brass and other high-ranking security officials the next morning, the
departing president accused Ter-Petrosian of seeking to `seize power by
illegal means’ and ordered them to take `all necessary measures to
maintain law and order in the country.’ In a clear reference to General
Grigorian, who was conspicuously absent from the meeting, Kocharian said
he `will not allow anyone to play a shadowy role’ in the deepening
standoff. The seven defecting lawmakers promptly withdrew support from
the opposition. Jahangirian was ambushed and arrested by a special
police squad later in the day. Several other prominent opposition
figures were detained in the following days.

Despite the wave of arrests, the opposition demonstrations continued
unabated and reached their peak on February 26, the day when Sarkisian
held his own rally in Yerevan’s main Republic Square in an effort to
show that he enjoys greater public support. It proved to be a public
relations disaster as thousands of people bused there from across the
country walked over to Liberty Square and joined the opposition crowd
even before Sarkisian’s rally was over. What the opposition plans to do
next was not clear, with Ter-Petrosian and his associates only telling
supporters to remain camped in the square. The authorities, for their
part, warned that their patience is wearing thin and that they can break
up the unsanctioned protests at any moment.

The United States and the European Union warned both sides not to resort
to force. `This peaceful exercise of the freedom of assembly, coupled
with effective, non-violent crowd management, is a notable achievement
and a sign of democratic progress,’ the U.S. mission at the OSCE
headquarters in Vienna said in a February 28 statement. `We call on all
sides to ensure that this peaceful situation continues.’ Kocharian said
the next day that the authorities are ready to `patiently wait until
that theatrical show dies out,’ implying that they will clear Liberty
Square only if the opposition attempts to seize government buildings.

At around 6:30 a.m. on March 1, the square was surrounded by hundreds
and possibly thousands of riot police, interior troops and other
security units. Within 10-15 minutes it was cleared of protesters, who
put up fierce resistance before chaotically fleeing the scene. Dozens of
them were detained on the spot, while others were chased hundreds of
meters away from the square. Some protesters are known to have been
caught by the police near the Yerevan State Circus, about two kilometers
away from Liberty Square and just a few hundred meters from the
epicenter of opposition protests that would erupt later in the day.

The only protester allowed to stay in the square was Ter-Petrosian.
Wrapped in a blanket, Armenia’s first president chain-smoked and watched
the police dismantle the remnants of the tent camp, the symbol of his
dramatic political comeback. `They want me to go but I told them that I
won’t leave this square unless they handcuff me and show an arrest
warrant,’ he told two RFE/RL correspondents that were allowed to
interview him there at around 8 a.m. Shortly afterwards he was forced
into his limousine and driven to his house overlooking the city center.

The Armenian government and police have said all along that security
forces dispersed the small crowd only after it refused to allow them to
search the square for weapons allegedly stashed there. The police claim,
in particular, that they received on February 29 `reliable information’
that the protesters will be handed firearms, explosives, iron bars and
other weapons to provoke `mass riots’ in the capital on March 1. A
handful of such weapons, which the police claimed to have found in the
square, were shown by government-controlled TV channels.

Ter-Petrosian and other opposition leaders contend that the police
planted the weapons to justify the break-up of the peaceful sit-in. Like
many ordinary campers, they say that they did not receive any demands or
prior warnings from law-enforcement officials before being attacked. The
police, which filmed the Liberty Square clash, have not released any
video evidence to the contrary.

The official rationale for the pre-dawn operation has also been
challenged by Armen Harutiunian, the state human rights ombudsman. `If ¦
fleeing demonstrators left guns behind them, then why is it that during
their dispersal, which was accompanied by beatings and resistance, not a
single gunshot was fired?’ he asked in an April report. The report said
that the purported search also violated Armenia’s Code of Procedural
Justice that requires court warrants and the presence of witnesses in
such cases.

Despite being placed under de facto house arrest on March 1,
Ter-Petrosian was able to hold a news conference in his residence that
started at around 11:30 a.m. Exuding trademark calm, he gave a detailed
account of the previous night’s events but was rather vague on what the
opposition plans to do next. `I don’t know what further developments
there will be,’ he said. `It is possible that a [rally] will erupt
spontaneously, and we are obliged to lead, to manage it. If I am allowed
to leave this house, I will naturally be with the people.’

`I think that Robert Kocharian and Serzh Sarkisian are finished,’ added
Ter-Petrosian. `I have a feeling that they won’t last even for 10 days
in Armenia.’

The charismatic ex-president was already informed that thousands of his
supporters, infuriated by the police actions, are converging on a
section of Grigor Lusavorich Street just outside the French Embassy in
Yerevan. Police units rushed to the area clashed with the rapidly
growing crowd but failed to disperse it. They could only cordon off area
for a while to keep the crowd from moving to Liberty Square and key
government buildings. None of the nine members of Ter-Petrosian’s
election campaign board were spotted there at that time.

It was Vartan Khachatrian and Zaruhi Postanjian, parliament deputies
from the opposition Zharangutyun (Heritage) party not directly involved
in the Ter-Petrosian campaign, that held first negotiations with
high-ranking police officials at the scene at around 1 p.m. It was
agreed that the crowd will be allowed to march through the city center
and rally outside the Matenadaran institute of ancient manuscripts,
another traditional venue for public gatherings in Armenia.

The protesters rejected the agreement. `The people were extremely
agitated and did not listen to anyone at that point,’ recalls
Khachatrian. `Many of them feared that the police would ambush and
attack them on their way to the Matenadaran.’

Major-General Sasha Afian, deputy chief of the national police,
reaffirmed the Matenadaran option during ensuing negotiations with David
Shahnazarian and Levon Zurabian, two close Ter-Petrosian associates who
arrived at the scene later in the afternoon. The crowd again refused to
budge. `The people felt that the police are trying to trap them,’ says
Zurabian.

But Vahagn Harutiunian, a senior official at Armenia’s Special
Investigative Service (SIS) leading the criminal investigation into the
March 1 events, dismisses this explanation, saying that the `organizers’
of the protest themselves did not let their supporters unblock Grigor
Lusavorich street in breach of an `explicit agreement’ reached with
Afian. Harutiunian says police forces left the blocked street section,
as well as the adjacent square outside the Yerevan municipality, at
about 2 p.m. because of that agreement.

Shortly after the police pullout, groups of mainly young men blocked all
three streets crossing the square with buses and other vehicles mostly
seized from the police. Adding to their anger were rumors (that turned
out to be false) that the police killed protesters in Liberty Square.
Standing near the French Embassy, one middle-aged woman infamously held
up a shoe that she claimed belonged to a 12-year-old girl allegedly
killed in the police assault.

Later in the afternoon, the crowd was joined by other opposition leaders
that had gone into hiding following the Liberty Square clash. One of
them, Nikol Pashinian, took the center stage in the escalating standoff,
inspecting the barricades and urging activists to fortify them. `The
authorities attacked peaceful protesters, and we have grounds to assert
that their hostile actions will be repeated,’ Pashinian declared at an
ensuing rally. `Our task now is to think about our defense.’

Many male protesters were already armed with metal and wooden sticks and
rocks. Some were busy preparing Molotov cocktails with petrol sucked out
of the seized police vehicles. Others began stopping public
transportation buses and using them for completing the blocking of all
streets, including Grigor Lusavorich, leading to the barricaded area.

In the meantime, Ter-Petrosian began negotiating with Kocharian through
the chief of the presidential security detail, Grigori Sarkisian, and
Western embassies in Yerevan. Ter-Petrosian would say afterwards that he
offered the authorities to calm his protesting supporters by addressing
them in person, leading them to the Matenadaran square and then telling
them to disperse until the next rally. Kocharian was only willing to let
the protesters move on to two locations outside the city center because,
as he would say at a March 5 news conference, the crowd would have gone
on a rampage had it been allowed to march through downtown Yerevan.
Speaking to foreign journalists on March 3, Ter-Petrosian said he
rejected Kocharian’s offer because he believed the authorities are
trying to lure the crowd away from the center and attack it `far from
foreigners’ eyes.’

The negotiations were apparently still going on when Foreign Minister
Vartan Oskanian and a senior police official held a news conference at
the presidential palace at 6:30-7 p.m. `The president is in serious
negotiations, but if these illegal actions continue the president will
have to declare a state of emergency to ensure public security,’ warned
Oskanian.

As he spoke, hundreds of interior troops, other police forces and,
according to some eyewitness accounts, army units massed in and around
Yerevan. By 8 p.m. security forces took up positions on two of the five
approaches to the barricaded area. They never moved further forward from
one of those `frontlines,’ only blocking two parallel streets and a park
leading to the Armenian prime minister’s office in Republic Square.
Other police units were deployed at the junction of Mashtots Avenue and
Grigor Lusavorich Street, more than 300 meters from the nearest
opposition barricade. They mostly consisted of interior troops
(officially called Police Troops) wearing heavy riot gear. Regular and
special police units, some of them armed with AK-47 automatic rifles,
were positioned behind them.

The eerie silence there was broken at 9-9:15 p.m. by deafening
explosions of stun grenades thrown by the police and stones and Molotov
cocktails coming from the barricade. The rows of interior troops then
began slowly advancing towards the barricade, backed up by tracer
bullets fired in the air by the special police moments later. The
continuing hail of rocks and petrol bombs forced them to move back. In
the meantime, opposition leaders delivered fiery speeches to thousands
of people who rallied less than 200 meters down Grigor Lusavorich
Street. All that the demonstrators could see from there were tracer
bullets flying overhead and lighting up the night sky for about an hour.
They responded to the gunfire with `Struggle to the end!’ and `Levon!
Levon!’ chants.

`We will not retreat from this square,’ Pashinian told the crowd. `But
we will not attack anyone either. If they attack us, they will get an
adequate response.’

`Dear people, they are simply trying to spread panic,’ said Miasnik
Malkhasian, an opposition parliament who was subsequently arrested and
accused of organizing the `mass disorders.’ `Please do not panic, stand
firm like men, and we will win.’

As the violence intensified, Pashinian issued orders to barricade
fighters and urged the security forces (both through loudspeakers and a
police radio seized by protesters) to switch sides. `Take up your arms
and redirect them against Kocharian’s and Serzh’s criminal clan. We will
stand to the end, even if all of us die in this square,’ said the young
editor of Armenia’s best-selling daily newspaper, `Haykakan Zhamanak.’
`People, we must finish the job tonight, enough is enough,’ Pashinian
told the thinning crowd later on.

According to Vahagn Harutiunian, the chief unrest investigator, the
authorities never attempted to disperse the peaceful demonstrators and
that the police forces charged towards the barricade only after
stick-wielding protesters `came out of the barricades and pushed
forward.’ `The law-enforcement forces tried to advance in order to stop
that movement and immediately came under attack,’ he tells RFE/RL.

Opposition leaders deny this, saying that the first clash, which
occurred on a Grigor Lusavorich Street section next to the Russian
Embassy, was provoked by the police. Whatever the truth, Captain Hamlet
Tadevosian, commander of an interior troop company, appears to have been
its sole casualty and the first person killed in the unrest. The
investigators say he was killed by a hand grenade or another explosive
device thrown by a protester. They also claim that some of the
protesters had firearms, pointing to, among other things, to police
footage of the first street battle that shows what looks like a trail of
automatic gunfire coming from the opposition side. The opposition denies
that any of its supporters used guns or grenades and blames the police
for Tadevosian’s death.

After the unsuccessful pitched battles the security forces retreated to
the Lusavorich-Mashtots intersection and then further back to Paronian
Street, leaving behind vehicles burned by the protesters. It was at that
crossroads that the protesters apparently suffered their first
fatalities. Three of them were shot dead there in still unclear
circumstances. Another protester was fatally wounded at the beginning of
Mashtots Avenue. Several shops in that area were looted by rioters after
10 p.m.

Not all speakers at the opposition rally condemned the looting and the
burning of cars parked nearby and blamed that on government `agents
provocateurs.’ `Even if they are looting oligarchs’ shop, they are
probably not committing a theft, they just found a way of punishing [the
authorities,]’ declared Shant Harutiunian, an obscure extreme
nationalist who played no part in the Liberty Square protests but was
one of the main opposition orators late on March 1.

The investigators believe the four other civilian deaths occurred on
Paronian Street and at its intersection with Leo Street where the police
forces retreated later in the evening, unable to contain the advancing
protesters despite using water cannons and continuing to fire tracer
bullets. They suffered their second casualty on Leo Street when an
interior troop serviceman, Tigran Abgarian, was shot in the neck and
died without regaining consciousness a month later. Law-enforcement
authorities say Abgarian was killed by one of the protesters, a claim
denied by the opposition. None of more than 100 oppositionists arrested
in the following weeks was charged in connection with the deaths of the
19-year-old conscript and Captain Tadevosian.

The investigators have also shed little light on the circumstances in
which the eight civilians lost their lives, saying only that three of
them were hit by tear gas capsules fired by the police. Vahagn
Harutiunian asserts that the police forces involved in the March 1
clashes did not receive prior orders to shoot at the demonstrators,
dismissing opposition claims to the contrary. `They were only ordered to
fire tracer and blank rounds in the air,’ he says.

Armenia’s law on police service allows police officers to use lethal
force for `repelling an attack that threatens their life or health’
without their superiors’ permission. The police believe the March 1
events posed such a risk but have so far stopped short of stating that
the deadly gunfire was necessary for neutralizing the danger. They have
stressed that more than 180 police officers and interior troop soldiers
received various injuries during the clashes. Forty-two of them were
injured by grenade explosions and required hospitalization, according to
law-enforcement authorities.

President Kocharian cited police casualties as he went on national
television at 10:30 p.m. to declare a three-week state of emergency and
order the Armenian military to restore `public order.’ Army units backed
up by armored vehicles began rolling into the capital shortly after
midnight. About one square kilometer of the city center was under full
or partial opposition control at that point. At around 4 a.m. on March 2
Ter-Petrosian made a phone appeal to the demonstrators remaining outside
the municipality and urged them to go home. "I do not want any victims
and clashes between police and innocent people. That is why I am asking
you to leave," he said.

The Armenian government continues to stand by its claim that the clashes
were pre-planned by the opposition with the aim of `usurping state power
by force.’ Seven of the arrested opposition members, among them
Ter-Petrosian’s election campaign chief, three opposition
parliamentarians and Shant Harutiunian (no relation to Vahagn), are
currently on trial on corresponding charges. Why Ter-Petrosian himself
has not been prosecuted for the alleged coup bid remains unclear.

The SIS’s Harutiunian says the criminal case against the seven
defendants contains `testimony by numerous people who clearly state that
they were told to go to the French Embassy.’ He says the official theory
is also supported by wiretapped phone conversations of opposition
leaders and police video of the March 1 events. Late last, year
Prosecutor-General Aghvan Hovsepian shared these and other details of
the case with John Prescott and Georges Colombier, the two Armenia
rapporteurs of the Council of Europe Parliamentary Assembly (PACE).
Prescott and Colombier described the purported evidence as unconvincing
in a January report to the Strasbourg-based assembly.

Opposition leaders insist that the street protests that followed the
police assault on Liberty Square were spontaneous. `After the dispersal
of the Liberty Square demonstration we lost control over the course of
events,’ Zurabian tells RFE/RL, adding that Ter-Petrosian’s campaign
team was too scattered and paralyzed to make decisions. `We didn’t even
know what’s going on,’ he says.

Zurabian, widely considered as the ex-president’s right-hand man, also
claims that the opposition had no contingency plans for a possible
break-up for its sit-in. Ter-Petrosian repeatedly assured supporters
camped in Liberty Square that Kocharian and Serzh Sarkisian are `not
crazy’ to disperse them by force. `You can now say that I was mistaken,’
he would tell journalists on March 11. `Our country is probably too
savage to be judged with rational categories.’

Zurabian believes that the opposition committed no `strategic blunders’
in the post-election period. `The only alternative was not to engage in
any political struggle in the first place,’ he says.

Khachatrian, the Zharangutyun parliamentarian, is more self-critical.
`At the end of the day, we are all responsible for the fact that people
got killed in the streets of Yerevan,’ he reckons. `One party more so,
the other less.’

There have been suggestions that Ter-Petrosian might have prevented
bloodshed had he been able to join the protesting crowd. The authorities
say that he was free to leave his house on March 1, but only without his
state-funded armed bodyguards. For Ter-Petrosian and his entourage, this
condition was illegal and amounted to a death threat.

`If he feared for his own security, then he should have also worried
about the security of the crowd,’ Kocharian scoffed at the March 5 news
conference. `He should have had the courage ¦ to go there and
participate in that rally.’

(Photo courtesy of )

U.S. Dollar In Short Supply In Armenia

By Anush Martirosian

Buying U.S. dollars was all but impossible in Yerevan on Friday in a
further sign that the exchange rate of Armenia’s national currency, the
dram, is no longer market-based.

Unlike many other currencies, the dram has not depreciated against the
dollar since the onset of the global financial crisis late last year.
The government and the Central Bank of Armenia (CBA) have since been
facing allegations by critics that they are using the country’s hard
currency reserves to artificially bolster the dram.

The authorities deny any heavy intervention in the currency market. Many
Armenians seem unconvinced by these assurances and anxious to convert
their dram savings into dollars. Lines of dollar buyers could be seen
outside some Armenian banks and currency exchange shops on Friday.
`Dollars are not for sale in any currency shop,’ one woman told RFE/RL.

`Everyone wants dollars, but we don’t sell them,’ complained one
currency trader at a food supermarket in downtown Yerevan. `It’s a
panic. I have only $125 in cash right now. I used to have $20,000 at
this time of the day.’

`People would buy even as little as $20,’ said another deal. `They are
panicking. The banks have not sold dollars in the last two days.’

`People are panicking,’ confirmed a branch manager at the Ardshininvest
bank, one of the largest in Armenia. He claimed that people can buy
dollars at the bank unless they want large sums.

But bank clients interviewed by RFE/RL claimed the opposite. `They say
they don’t have dollars,’ one of them said.

A spokesman for the CBA, Zaruhi Barseghian, denied that the greenback is
in short supply in Armenia these days. She said there might only be
temporary shortages caused by currency retailers `catering for the
shadow economy’ and engaged in `speculative games.’

`There are no problems,’ Barseghian told RFE/RL. `The banking system is
functioning well.’

(Photolur photo)

Armenian Premier Visits Russia

By Aza Babayan in Moscow

Prime Minister Tigran Sarkisian paid a one-day working visit to Moscow
on Friday that was expected to focus on economic issues and, in
particular, Russia’s promised anti-crisis assistance to Armenia.

Sarkisian was meeting with Russian Prime Minister Vladimir Putin late in
the evening after holding talks with the governor of the Russian Central
Bank, Sergey Ignatiev, and Igor Levitin, the Russian co-chairman of an
inter-governmental commission on bilateral economic cooperation. He was
due to discuss with them, among other issues, the terms of a $500
million loan that Moscow has pledged to provide to Yerevan with the aim
of helping it cope with the global economic crisis, which is hitting the
Armenian economy increasingly hard.

Meeting with Moscow-based Armenian businessmen earlier in the day,
Sarkisian said the loan will be disbursed in March but did not specify
how his government plans to spend it. He also outlined the government’s
broader strategy of mitigating the effects of the global downturn. The
government will not only seek to stimulate the economy with external
loans but also strengthen the rule of law, he said, describing
government corruption as a serious hurdle to Armenia’s economic
development.

The prime minister also urged the entrepreneurs, may of them born in
Armenia, to invest more heavily in his country. `Welcome back to
Armenia,’ he said, claiming that many Armenians are already returning
home because of worsened economic conditions in Russia.

(Photolur photo)

PRESS REVIEW

`Chorrord Ishkhanutyun’ regards the economic situation in Armenia as
`disastrous.’ The opposition paper claims that in the past few months
the Armenian government has borrowed more from foreign sources in the
previous 17 years taken together. `There is no guarantee that that will
rescue the situation,’ it says.

`Haykakan Zhamanak’ reports that the Central Bank of Armenia (CBA)
sharply cut back on sales of U.S. dollars to commercial banks at the
Yerevan stock exchange on Thursday in order to keep up the value of the
national currency, the dram, without using up more of its hard currency
reserves. `With blackmail and threats, the Central Bank banned the banks
from trying to purchase foreign currency at the stock exchange,’ says
the paper.

`Zhamanak’ editorializes that the idea of political dialogue in Armenia
has been `devaluated’ because each of the rival political factions is
`pursuing maximalist goals.’ The paper argues that the authorities say
such a dialogue can start only after the opposition stops holding
demonstrations, whereas the opposition says dialogue must definitely
lead to fresh parliamentary and presidential elections. It says both
approaches are wrong because `dialogue presupposes mutual concessions,
agreement, respect for the opposite side’s view.’ `In today’s Armenia
the authorities are primarily unprepared for such tolerance,’ it says,
adding that the opposition can not accept the government conditions.

Samvel Nikoyan, head of the parliamentary commission investigating the
March 1 clashes in Yerevan, notes in a `Hayots Ashkhar’ interview that
Armenia’s Criminal Code currently sets punishment only for completed
`usurpation of state power,’ rather than attempts to expedite it. `A
question arises: if you have successfully seized power, who is going to
prosecute you?’ argues Nikoyan.

`Yerkir’ criticizes the way in which the Central Election Commission
(CEC) is preparing to hold the May 31 municipal elections in Yerevan. In
particular, the paper is skeptical about the effectiveness of training
courses for members of precinct election commissions which are planned
by the CEC.

(Aghasi Yenokian)

http://ditord.com

Review & Outlook – 02/27/2009

SEEKING SOLUTIONS WITHIN

By Vartan Oskanian

February 26, 2009

The official statistics released in February simply reiterate the
inarguable truth: Armenia is heading towards a recession.

Although these facts are not being hidden, they are not being
explained either. The government continues to believe (and rightfully
so) in the importance of confidence as a key factor of economic
stability and is therefore trying to inspire trust and faith. But it
is doing so without basing its oratory and encouragement on economic
realities, or without actions which assure the population that steps
are being taken to ameliorate the situation.

These are unconventional times and require unconventional remedies,
including some outside the IMF-World Bank prescription box, not unlike
those to which the major economies of the world have already resorted.

I believe that several steps, taken together, can minimize the
economic decline.

First, there is a need for open, courageous and sustained public
dialogue which is missing, and which would go a long way to inspire
confidence and faith in the steps being taken to improve the financial
situation. Consumer confidence regarding the government’s economic
policies are equally critical in this formula. Some of the
government’s actions raised doubts in the public’s mind about the
government’s ability to respond to this crisis.

First, there were the early pronouncements about this global crisis
circumventing Armenia, which raised questions about the government’s
sincerity and did nothing to meet the government’s concern about not
creating a panic. Earlier, the government insisted on passing a budget
based on a high 9 percent growth even as the government’s own numbers
were already indicating that this is not a realistic goal. They
preferred the politically desirable picture but instead got an
economically unrealistic scenario, counting as they said they were, on
a quick global rebound. As a result, the compact between business and
government remains broken. The confidence-inspiring rhetoric was not
able to transform reality.

Second, it is important that the government discuss the Russian
Federation $500 million loan with the public and engage it in a
conversation about its efficient use. There is no doubt that Armenia
clearly needs this money to mitigate the impact of the crisis. The
challenge is that it be used to ensure economic growth. Does the
Armenian government intend to use the funds to meet its current
budgetary obligations? Will it loan at least part of the funds to
local banks? Or will it invest the funds in competitive sectors, such
as agriculture and mining which have growth potential and local social
and economic significance? In other words, shall Armenia use the
crisis to solve existential issues and address the short-term
challenge of restraining social disenchantment, or should it think
about sustainable development? Third, new money alone will not solve
the economic woes either. A step the government must take, and is
already late in taking, is to let the Dram find its normal market
exchange rate. Already, since early 2008, over $440 million of
Armenia’s reserves has been spent to maintain this stability.

This spending is nearly equal to the $500 million we are going to owe
the Russians. This is not sustainable. Sooner or later, the government
will be forced to adopt a more flexible exchange rate policy. In fact
a depreciated Dram and more realistic Dram rate will boost the value
of foreign capital, will enhance the purchasing power of the many who
rely still on foreign remittances, will stimulate exports and will
promote tourism, which have already suffered as a result of the high
Dram value.

Fourth, a government committed to tax reforms must judge correctly not
just the nature of the reform but also its timing. While taking the
crucial step of modifying the tax structure to help small and medium
enterprises, the government is at the same time placing the heaviest
burden on the smallest taxpayer by insisting on cash registers for the
tiniest individual entrepreneurs, thus driving many out of
business. This step could have been delayed. Taxes on the little guy
can and should be assessed, but only after the real bottlenecks in our
economy are lifted. Monopolies and non-competitive systems are the
real causes constricting our economy.

Fifth, the time is right to allow for a larger budget deficit. In an
economy where inflationary pressures are low, when credit is tight,
when there is a clear economic slowdown, enlarging the budget deficit
is not only acceptable but necessary. Armenia’s deficit has been well
within the internationally advocated three percent of GDP. Under
today’s unusual circumstances, the budget deficit can be allowed to
grow to even six percent of our GDP. That additional emission of money
can fund public works, thus creating jobs, improving infrastructure
and stimulating the economy.

Sixth, this is indeed the time to bring back the best of government
intervention on the basis of public-private partnership. It was a
laissez-faire, non-regulated market that led to this global crisis.

Depending on more of the same unrestricted market developments now
means tolerating the excesses of capitalism instead of reining them
in. That is what the world has learned. In Armenia, if we were hoping
that at the end of this transition, the pendulum that swung from
abject communism to extreme capitalism was to come to rest somewhere
in the middle between unrestricted competition and total dependency,
this crisis allows, indeed forces the government to take on greater
responsibility for wise engagement in the economy and at the same time
take practical steps to address social problems and ameliorate the
conditions of the most vulnerable in society.

Finally, there is a seventh area of action that cannot be avoided or
ignored any longer and that is our political reality. The economy
rests firmly on politics and law, on predictability and consistency,
on transparency and equality. The political situation that exists
around us today does not provide space for our economic dreams. It is
not just the polarization, it is not just the cynicism, it is not just
the lack of trust. It is also the insufficient respect for property
rights, it is the sense of impunity on the part of those on whom we
depend to reinforce the rule of law, it is the inarguable monopolies
at the basis of so much of our trade. The government’s responsibility
is to secure our economy and our security. Both require a healthy
domestic situation. The government may not be solely responsible for
today’s mess, but it has the sole capacity to bring the country out of
this mess. There is no way to withstand today’s economic crisis
without addressing and resolving today’s political crisis. This crisis
is economic and domestic, but it will inevitably affect our foreign
relations and thus can affect our security.

In other words, the global economic crisis may have exacerbated the
weaknesses of our own economy. The domestic political crisis may have
come about as a result of bad judgments on the part of all political
actors. But the solution must be sought from within. Not from the
Diaspora, which is living its own economic crisis. Not from Russia and
China, where money and political expectations come together. But from
our own small economy whose problems we see, whose solutions are
within reach.

This is the time for responsive governance, for a demonstrated
willingness to share the burden for the well-being of all
citizens. This is also the time to rally the brainpower and good
intentions of those in and out of government, the experience of those
in and out of business, the insights of civil society, to make the
right decisions.


This article was published in Yerevan’s CAPITAL Daily newspaper, in
Armenian. Vartan Oskanian is the founder of the Civilitas Foundation
and former foreign minister of the Republic of Armenia.

Russia Is Using Financial Reserves To Assist Its Strategic Allies

RUSSIA IS USING FINANCIAL RESERVES TO ASSIST ITS STRATEGIC ALLIES

PanARMENIAN.Net
26.02.2009 23:53 GMT+04:00

Russian analysts think that the world economic crisis is an internal
challenge for Russia as well as posing obstacles for the integration
of structures and bilateral alliances in the CIS.

Despite being in crisis Russia has started using its financial reserves
to assist its strategic allies. For instance it has promised to allot
Armenia USD 500 thousand million as a stabilization credit. Kyrgyzstan
will receive assistance worth USD 2 billion. Belarus has already
received USD 1 billion, half of the promised amount. There are also
negotiations being held about issuing USD 5 billion in credit to
Ukraine as well. The analysts think that Russia does not actually want
to issue these credits but is being forced to in order to retain its
influence and the prospect of further strengthening its position,
as neighboring countries might otherwise reorient their politics
towards Washington and Brussels.

If Moscow can actually afford such large scale assistance to
neighboring countries this shows it really can become a leader in
reality rather than words. In order to bolster this impression Russia
is proposing different initiatives, for instance recently the Kremlin
initiated a multi-aspect agreement between CIS countries concerning
free trade. However the possible inability of its allies to repay
these loans represents a risk for Russia.

For Moscow it is of vital importance to ensure the uninterrupted
transit of its energy to consuming countries. Therefore although
Russia faces serious challenges its political leadership is prepared
to take these risks, The Messenger Online reports.

2008 Armenia-Sverdlovsk region trade turnover exceeds AMD 1.6 bil

Armenia-Russian Sverdlovsk region trade turnover exceeds 1.6 billion
drams in 2008

YEREVAN, February 20. /ARKA/. Trade turnover between Armenia and
Russia’s Sverdlovsk region rose 24% to over 1.6bln drams, Robert
Harutyunyan, General Director of Armenian Development Agency (ADA),
said today in Yerevan during a roundtable with the Sverdlovsk
delegation.

Appreciating greatly of bilateral cooperation, Harutyunyan stressed the
importance of Sverdlovsk Governor Eduard Rossel’s latest visit to
Armenia and the Armenian delegation’s visits to the Russian region.

According to ADA, Armenian exports to Sverdlovsk fell 7.2% year-on-year
to 327mln drams, whereas imports rose 35% to 1.3bln drams.

In the past three months, two ADA delegations and a delegation from
Armavir region discussed prospects of bilateral cooperation in the
fields of agriculture and reprocessing of agricultural goods.

Harutyunyan expressed a hope that bilateral visits would help establish
mutually beneficial contacts.
The ADA Director pointed out a number of difficulties in transport
communications between Armenia and Sverdlovsk, stressing the need for
establishing air communication and alternative routes trough Iran and
the Caspian Sea.

`Sverdlovsk region is a key route for Armenian exports to Russia,’
Harutyunyan said, adding the Sverdlovsk government has submitted a
cooperation development project for 2009-2010 to Armenia.
`We must sign it in order to have a specific cooperation plan for our
joint activities,’ the ADA Director said.

The delegation of Sverdlovsk region arrived in Armenia on February 19
on a five-day visit. The Russian delegates plan to visit Armenia’s
Armavir region and participate in the Bridge 2009 international
economic forum in Tsaghkadzor resort. `0–

Armenia’s Israeli friends re-elected to Knesset

PanARMENIAN.Net

Armenia’s Israeli friends re-elected to Knesset
21.02.2009 15:02 GMT+04:00

/PanARMENIAN.Net/ Media reports suggest that former prime minister
Benjamin Netanyahu of the right-of-center Likud party is most likely
to lead the next government, which might also include his main rival,
outgoing foreign minister Tsipi Livni of the centrist Kadima party.

On February 19 Mr. Netanyahu won the support of two right-wing parties
that won the third and fifth largest shares of seats in the
parliament.

Among those re-elected is co-chair of the Israel-Armenia parliamentary
friendship group, Zeev Elkin, now with Likud. Mr. Elkin was elected to
the Knesset in 2006 on the Kadima list, but left the party over its
support for a Palestinian state. Last year, Mr. Elkin sought to raise
the long-taboo subject of the Armenian Genocide in the Knesset.

Also re-elected was Chaim Oron, veteran politician and leader of a
small leftist Meretz party, who has long championed Armenian Genocide
affirmation efforts.

Among those not re-elected was Yosef Shagal, a lobbyist for Azerbaijan
who, following several public embarrassments, was dropped from the
list of the Yisrael Beitenu party of Avigdor Lieberman, Armenian
Reporter says.

ANKARA: Armenian Question Documentary Causes More Controversy

ARMENIAN QUESTION DOCUMENTARY CAUSES MORE CONTROVERSY

Today’s Zaman
Feb 20 2009
Turkey

Disputes surrounding a recent directive by the Ministry of Education
requiring that a controversial documentary on the Armenian question
be screened at Turkey’s primary schools have become even more heated
as Turkey’s Armenian citizens have appealed to Prime Minister Recep
Tayyip Erdogan against showing the documentary.

While Armenians are disturbed by the required screening of the
documentary, called "Sarı Gelin: Ermeni Sorununun İc Yuzu" (Yellow
Bride: The True Face of the Armenian Question), at primary schools,
it has been revealed that the General Staff was not involved in
making the documentary as had been previously claimed. Meanwhile, the
Ministry of Education has said the documentary was sent to schools
as an educational resource for teachers, not students. Armenians,
concerned the documentary would confuse younger students, have sent
a letter addressed to Prime Minister Erdogan asking him to suspend
the screening of the controversial documentary.

Karun Kovan, vice president of the Armenian group Karagözyan
Vakıf, said Armenians believe the documentary should not be shown
to children, or even adults, of any nation, let alone to students in
Armenian schools in Turkey. "We want the screening to be called off
because this will promote violence and discrimination and breed hatred
among the students," he added. The History Foundation of Turkey has
also described the documentary as a propaganda film and said it was
inappropriate for students because it would promote enmity.

In a memo sent to schools, the Ministry of Education asked that
schools submit a report by Feb. 27 on the effect that the documentary
had on students. The memo said the documentary had been prepared by
the General Staff.

However, İsmail Umac, who produced the documentary, said there was
no link between the documentary and the General Staff, adding: "This
documentary was prepared by our company. I distribute the documentary
to anyone who pays for it. The documentary is not a biased production
that promotes the Turkish view of the events. It is objective. There
were 14 historians from different countries involved, and archives
from nine countries were examined. If the documentary was biased, the
[Armenian] diaspora would have shown a strong reaction when it was
distributed in the European version of Time magazine and in Russia."

Plans for sending the documentary to primary schools were initially
discussed two years ago. A coordination committee set up to dispel
baseless genocide claims sent the documentary to the Ministry of
Education on March 15, 2007. On Dec. 17, 2007, 56,388 DVD copies of the
documentary were delivered to the Board of Education and Discipline and
then sent out to primary schools in the summer of 2008. In a statement
issued on the recent controversy, the Ministry of Education said the
documentary was sent to primary schools as an educational resource
to be used by teachers, not to be shown to students, and said the
distribution of the remaining half of the copies has been discontinued.

Meanwhile, Serdar Kaya, the parent of an 11-year-old girl, filed a
criminal complaint yesterday with the Uskudar Prosecutor’s Office on
the grounds that the documentary negatively influenced his daughter’s
psychology.

The "Yellow Bride" is the name of an Armenian folk song that is also
popular in Turkey.

Armenia claims that the mass deportation of hundreds of thousands
of Armenians by the Ottoman Empire in 1915 amounted to genocide,
while Turkey strongly denies the claim.

Police Disperse Action Of Protest Organized In Front Of RA CEC

POLICE DISPERSE ACTION OF PROTEST ORGANIZED IN FRONT OF RA CEC

Noyan Tapan
Feb 19, 2009

YEREVAN, FEBRUARY 19, NOYAN TAPAN. The Police dispersed the action
of protest organized in front of the RA Central Electoral Commission
building by the Special Regiment youth organization on February 19. As
Noyan Tapan correspondent was informed by the organization members,
on the occasion of the anniversary of the 2008 presidential elections
they had decided to hold an action of protest reminding that the
elections were held with all-round falsifications. However, some
hours before the announced hour of the action, 14:00, over a dozen
of police cars had blocked the entrance to the park in front of CEC
and police special forces in red berets prohibited 30 demonstrants
to enter the territory, then pushed them driving them away to the
Armenian National Congress building in the vicinity.

Action participant Aram Manukian, a Board member of the Armenian
National Movement party, said in his interview to journalists that the
police forces in red berets were especially rude to girls, as well
as tore the RA tricolor, while the action had been organized within
the framework of the law. "It is merely a manifestation of fear, the
authorities are just terrified, as they know that many people will take
part in our rally to be held on March 1," A. Manukian said. According
to another oppositionist, Matenadaran Deputy Director Arshak Banuchian,
"the policemen executing orders today will become victims of the system
established by their masters tomorrow." In his affirmation, the acts
of violence will contribute to the March 1 rally’s being very crowded.

Ardshininvestbank Receives International Quality Management Certific

ARDSHININVESTBANK RECEIVES INTERNATIONAL QUALITY MANAGEMENT CERTIFICATE

Noyan Tapan
Feb 19, 2009

YEREVAN, FEBRUARY 19, NOYAN TAPAN. Ardshininvestbank has received
an international ISO 9001:2000 certificate of the quality management
system.

The certificate was granted by AB Certification independent audit
company (France) in December 2008 based on the positive conclusion of
the audit of the bank’s conformity to the quality management standard.

In the process of certification, the bank was cooperating with
Integrated Management Solutions organization.

The Chairman of Ardshininvestbank’s Board Aram Andreasian said the
certificate was received as a result of considerable work done by
the bank with the aim of introducing high quality and modern banking
services and making this process most manageable and reliable.