Author: Yeghisabet Arthur

IT WILL NOT TAKE MUCH EFFORT FROM GOVERNMENT
James Hakobyan

Lragir.am
26-06-2007 15:26:21

Armenia has considerable experience in sale and donation of strategic
companies. The experience is so considerable that one will hardly
remember which one was sold and which one was donated. The border
of sale and donation is blurred. For instance, we sold the thermal
power plant of Hrazdan but we are going to pay the money from its
sale to the same Russians in return for the Russian gas within three
years. And perhaps the government could not make head or tail of
the list of sold or donated companies anymore and decided to put
out the Armenian railroad to concession. A concession is relatively
new to the history of the Armenian management. Perhaps only the
concession of the airport is known among the strategic companies,
and perhaps also the financial concession of the atomic plant. Soon
Armenia will sign the third major concession. Judging by the previous
two, it does not seem to be bad. For instance, in the sixth year the
concessionaire of the airport Eduardo Eurnekian gave us new, beautiful
and modern arrival and departure lounges. If everything is OK, by 2012
the concessionaire will give Armenia a new airport. In other words,
the concession of the airport works.

In the case of the atomic plant, although the management was taken
up by the Russians, it has worked without debts, fuel problems and
financial crisis for a few years now. In other words, we may say that
concession is justified.

Logically, the concession of the railroad is the optimal way of
management, modernization and competitiveness, when the company
remains the property of Armenia, but is improved by the efforts of the
investor. There is a nuance, however, which departs from the logic
of the tender for the railroad. A few months ago the members of the
Armenian government did not hide that they would wish Russia to take
up the management of the railroad. At first sight, this innocent custom
to give everything to the Russians is a subjective opinion, and cannot
be crucial to the tender because it has distinct measurements and the
winner must be eligible, despite the attitude of the judges. However,
Armenia has had a case of privatization when the tender was based
on clear benchmarks but in the end the company won which did not
comply with any of the benchmarks. The distribution network was put
out to tender, which was the World Bank’s stipulation for the last
disbursement of the SAC4 loan. This loan had a vital importance for
Armenia because it went to the state budget.

The network was put out to tender, and since it was held under the
scrutiny of the World Bank, the Russian companies were not eligible
because they lacked financial transparency. Meanwhile, the Armenian
government was rumored to be likely to sell the network to a Russian
company. After the Russians had been considered ineligible, the
Armenian government found the way of not selling the distribution
network to the Western companies. The terms of the tender were changed,
protests allegedly organized by the opposition were held. In other
words, total psychological pressure was put on the Western buyers. As
a result they rejected the network one after the other. The tender
was cancelled. After a lasting period the distribution network was
sold to an offshore company called Midland Resources which had no
experience of management in the energy sector. Afterwards, Midland
Resources sold the distribution network to RAO EES. In other words,
the Armenian government intended to sell it to the Russians and found
the way to fulfill its intention.

The Western companies which have strategic interests in Armenia are
certainly aware of this incident. Perhaps this is the reason why
no major Western company has made investments in Armenia. And it is
possible they will not bid for the railroad and the Armenian government
will encounter no difficulty to provide the Russian victory. The
government will not have to change the benchmarks of eligibility or
hold protest meetings. Unlike us, the world understands everything
at once.

ARMENIAN, TURKISH MINISTERS DISCUSS TIES, KARABAKH – AGENCY

Mediamax news agency
26 Jun 07

Yerevan, 26 June: Armenian Foreign Minister Vardan Oskanyan met
his Turkish counterpart Abdullah Gul on 25 June in Istanbul within
the framework of the summit of the Black Sea Economic Cooperation
Organization (BSEC).

As Mediamax was told in the press service of the Armenian Foreign
Ministry, Vardan Oskanyan confirmed the readiness of the Armenian
side to normalize the relations with Turkey without preconditions.

The Armenian and Turkish foreign ministers also discussed the
latest developments in the process of the Nagornyy Karabakh conflict
settlement.

Abdullah Gul stated the interest of Turkey in the speedy and fair
resolution of the given conflict.

[Passage omitted: Oskanyan’s other meetings in Istanbul]

PRESS RELEASE
Date: June 21, 2007
Armenian National Committee of America
Eastern Region, USA
P.O. Box 419, New York, NY 10108
Contact: Karine Birazian
Tel: 917-428-1918
Email: [email protected]
Internet:

ANCA-ER EXEC. DIRECTOR VISITS CONGRESSIONAL OFFICES;
ARMENIAN AMERICAN ACTIVISTS IN ALBANY NY

Teams Up with ANC Albany Chapter to Promote Genocide Resolution;
Holds Heartwarming Meeting with Genocide Survivor Edna Mategian

Albany, NY- Armenian National Committee of America Eastern Region (ANCA-ER)
Executive Director Karine Birazian and Regional Board Member Isabel Ohanian
reached out to Armenian American activists and Congressional offices in
Albany, New York, expanding the recently launched POWER initiative: Project
Outreach Waves the Eastern Region to upstate New York.

Birazian, Ohanian and ANC of Albany activists met with staff from the
offices of Senators Hillary Clinton (D-NY) and Charles Schumer (D-NY), and
Representative Michael McNulty (D-NY-21) to thank them for their support on
a wide range of Armenian American concerns, including their cosponsorship of
Armenian Genocide legislation. The ANC team also met with Darius Shahinfar,
Regional Representative for freshman Representative Kristen Gillibrand
(D-NY-20) to explore areas of expanded cooperation.

ANC of Albany Chairman Antranig Karageozian, who has been active with the
chapter since its formation in 1995 commented, "though the community is
small, we are quite active on a range of issues from meeting with
Congressional Representatives to planning local Armenian Genocide
commemorative activities. We look forward to continue the outreach,
strengthen the community, expand relationships with our federal and state
officials."

Birazian also had an opportunity to visit with genocide survivor Enza
Mategian. Born in Samsoun on August 9, 1909, Mategian spoke with Birazian
and other community members about her struggle to survive the genocide and
her family’s subsequent escape to Damascus. In 1931 Mategian moved to
Hartford, CT, eventually marrying and relocating to Albany, NY, where she
now lives in Tersian Nursing Home. "I was only 6 years old at the time of
the Genocide. I remember seeing the Turks come and take my father from the
home; my mother, brother, and I had to leave everything. I remember being
hungry all the time. I was too young at the time to understand, but still
remember the death marches," commented Mategian who will be 98 this August.

On the evening of June 13th, community members from throughout the greater
Albany area gathered for a briefing by Birazian on a wide range of ANCA
supported projects, including passage of the Armenian Genocide legislation,
H. Res 106 / S.Res.106, ongoing efforts to prevent the appointment Richard
Hoagland as Ambassador to Armenia, and foreign aid to Armenia and Nagorno
Karabakh. Birazian also gave a workshop on effective advocacy techniques in
reaching out to Congressional and State legislators.

"It was wonderful to spend time meeting with Armenian American activists in
Albany," commented Birazian. "It was a great opportunity to update the
community on pressing issues the ANCA is working on. I look forward to
continuing to work with the local chapter."

The Armenian National Committee of America (ANCA) is the largest and most
influential Armenian American grassroots political organization. Working in
coordination with a network of offices, chapters, and supporters throughout
the United States and affiliated organizations around the world, the ANCA
actively advances the concerns of the Armenian American community on a broad
range of issues.

####

Photo Caption
Left to Right: ANCA-ER Executive Director Karine Birazian, Armenian genocide
survivor Edna Mategian, and ANCA-ER board member Isabel Ohanian

Left to Right: ANC of Albany Chairman Antranig Karaegozian, Isabel Ohanian,
Darius Shahinfar, Regional Representative Rep.Kristen Gillibrand (D-NY-20)

REPORT "EDUCATIONAL REFORMS IN ARMENIA" PUBLISHED

Noyan Tapan
Jun 25 2007

YEREVAN, JUNE 25, NOYAN TAPAN. "The problem set in front of the
Armenian citizens and officials is the fact that they should jointly
decide what society to build and what educational system to choose in
order to contribute to the development of the country." This statement
was made by Consuelo Vidal, the Permanent Representative of the UN
Development Program (UNDP) in Armenia, at the presentation of the
Human Development National Report "Educational reforms in Armenia"
on June 22.

In her opinion, there is a demand for educational strategic problems’
discussion, and the framework of such discussions is proposed in
the report.

Consuelo Vidal also mentioned that the fact that Armenia is currently
in the process of reforms, that should be supported, is taken into
consideration in the report.

Levon Mkrtchian, the RA Minister of Education and Science, mentioned
that the educational system of Armenia is thoroughly analysed in
the Human Development National Report-2006, certain solutions and
definite steps are suggested in order "to reach significant changes
and considerable results" in the sphere of educational reforms. The
Minister believes that the workers of the educational sphere should
not be afraid of changes, but at the same time they should not forget
about the historical, educational, and cultural heritage of Armenia.

It should also be mentioned that the Report has been prepared due to
the support of the UNDP and the participation of the USAID.

DASHNAKTSUTYUN LEADER CALLS FOR YEREVAN TO TRANSFER POPULATION IN NAGORNO KARABAKH

Azeri Press Agency, Azerbaijan
June 25 2007

"The international community has come to understand that resolution
of the Nagorno Karabakh conflict demands much time. While Azerbaijan
had better understand that the choice is to be made between NKR’s
independence and its joining Armenia," Kiro Manoyan, director of the
Armenian Revolutionary Federation- Dashnaktsutyun Political Affairs
Office underlined, APA reports. Manoyan called for official Yerevan
to transfer Armenian population to the "liberation territories". He
ruled out any financial problem for transference of Armenians in the
occupied territories of Azerbaijan.

Azerbaijani Foreign Ministry spokesman Khazar Ibrahim commenting on
Manoyan’s remarks called this challenging.

"Dashnaktsutyun is represented in Armenian parliament. Regrettably,
such remarks sound like very dangerous fascism rather than civilized
policy of the corresponding forces. Manoyan’s calls for settling
in occupied Azerbaijani regions resemble the remarks of Gebbels
in Fascist Germany. He also used to call for settling in occupied
territories. Since a country pursues such a policy in the 21st century
and its is pursued by a political organization in the parliament,
Armenia seems to be insistent in the outlawed activity based on using
force," the spokesman underscored.

THE CURRENT SITUATION IN ARMENIAN COMMUNITIES
By Sevak Hakobian

Yerkir.am
June 22, 2007

Development of information and communication technologies, open borders
and migration have made it considerably difficult to preserve national
identities, cultures and traditions.

Elaboration of new approaches for preservation of the Armenian
identity has emerged as an urgent challenge. Noravanq Scientific-
Educational Foundation, the Caucasus Media Institute and Yerkir
Union for Repatriation organized a conference titled "The Current
Situation in the Armenian Communities" on June 19-20. Guest speakers
from Irkutsk, Kuban, Krasnodar, Pyatigorsk and Javakhq participated in
the conference. During the two-day conference the current situation in
the Armenian communities in Russia, prospects for their development,
the situation in the Armenian communities in Georgia, possibilities
for integration and repatriation were discussed.

Director of Noravanq Foundation GAGIK HARUTYUNIAN noted in his opening
remarks that the Foundation’s attempt to calculate how many Armenian
communities there are in the world had failed. This means that we
do not have adequate information about the Armenian communities in
other countries.

"It is not the territory that determines the power of a state but
first of all the demographic situation in the country," chairman of
Yerkir Union SEVAK ARTSRUNI stated.

Over 70% of the Armenians live outside their historical homeland. 60%
of Armenia’s population lives in Yerevan and the regions adjacent to
Yerevan. Demographics is very important in this context. It includes
repatriation, resettlement, natural growth of the population that
will lay the firm foundation for strengthening of the nation state. We
should aim to ensure that the Diaspora Armenians are closely connected
to Armenia.

This envisages direction of economic programs towards Armenia as well
as strengthening of cultural, intellectual and scientific connections
with the homeland. Such "Armenia-centrism" will not only contribute
to the strengthening of our country but will also slow down the
dissolution of the Diaspora. The Diaspora Armenian communities
and the demographic situation in the Diaspora should be studied in
detail. Repatriation of Diaspora Armenians should become our common
national will.

Head of the Government Administration Minister Manuk Topuzian welcomed
the participants of the conference on behalf of the Government noting
that it is necessary to strengthen the connection between the Diaspora
and Armenia.

Armenian communities in Russia

Speaking about the Armenian communities in the post-Soviet space
EDUARD MELKONIAN, researcher from the Institute of History of the
RA Academy of Sciences noted that Russia hosts the largest number of
Armenian communities.

1/3 of all Diaspora Armenians live in Russia, Belarus and
Ukraine. People emigrate from Armenia mostly because of hard
socio-economic conditions.

Political parties and cultural organizations that are peculiar for
the Diaspora could not emerge in the Armenian communities in Russia.

Professor of the University of Irkutsk VICTOR DYATLOV noted that
there are differences between the perception of the Armenian identity
by the Armenians who immigrated to Russia earlier and those who
immigrated recently.

The nature of the emigrants, their orientation as well as their
adaptability is changing. Since Russia is a "country of immigrants"
various conflicts between the immigrants and the receiving society
emerge. If the immigrant community is closed this might cause a
conflict between the community and the host country.

Professor of the State University of Kuban Mikhail Savva spoke about
the Armenians in Krasnodar region. The largest Armenian community in
this region is in Kuban. Over half of the Armenians living in Kuban
are men which means that these are mostly migrant workers. The economy
of the Krasnodar region needs migrant workers therefore the regional
authorities support immigration.

The Armenian community is the second best integrated community in the
region after the Ukrainian community. As a result of such integration
only 1500 Armenian children are studying the Armenian language. The
Armenian community is organizing various cultural events, religious
ceremonies, lectures in order to preserve the community’s Armenian
identity.

Chief Editor of Yerkramas Newspaper in Krasnodar TIGRAN TAVADIAN says
Armenian students in schools are interested in learning the Armenian
language but there are very few teachers of Armenians in the schools.

Besides, the Armenian community is rather passive in terms of
cultural and educational initiatives. Armenian communities in other
countries are closely connected with the Armenian Church. Meanwhile,
in Krasnodar there are 10 Armenian churches but Armenians go there only
on holidays. In this context assimilation of the Armenians is imminent.

The Hay Dat Cause is only limited to commemorating the Armenian
Genocide on April 24. The Armenian Apostolic Church is considered the
unifying force for the Armenian community in Stavropol. The Church
organizes various cultural events. However, it is necessary to revive
the national consciousness among the young people here. 5.5% of the
population in Stavropol, 150-160 thousand people, is Armenian.

Professor of the University of Pyatigorsk VIKTOR HAKOBIAN pointed
out lack of Armenian newspapers among the problems of the Armenian
community. The Armenian Panorama Newspaper is the only Armenian
newspaper in the region.

Armenians are not represented in the regional
authorities. Anti-Armenian acts can sometimes be observed such as
destruction of Armenian cemeteries, an attempt to set the Pyatigorsk
Cultural Center on fire, etc. Nevertheless, the local authorities are
trying not to show any negative attitude towards the immigrants. If
Armenian wants Diaspora Armenians to return to their homeland,
Russia in its turn wants them to stay in Russia because Russia has
demographic problems. Hakobian stressed the importance of establishing
a scientific center in Stavropol, and activating the youth centers.

Armenian communities in the Caucasus: the present situation with
Hamshen Armenians

Senior researcher from the Armenian Studies Center at Yerevan State
University HAYKAZUN ALVRTSIAN spoke about the present situation
with the Hamshen Armenians. The Hamshen Armenians lived in Turkey
till 1890’s.

The Hamshen Armenians were massacred in the Ottoman Empire and forced
adopt Islam. They escaped massacres and spread throughout the Pontiac
cost of the Black Sea and after the Armenian Genocide they escaped
to the Russian costs of the Black Sea, to Abkhazia and Anapa. Due to
the continuous and consistent policies of forced adoption of Islam
and genocide the Hamshen Armenians were divided into two large groups.

The Turkish segment of the Hamshen Armenians preserves the national
traditions but is heavily influences by the Turkish culture. The
Hamshen Armenians are facing common problems and community
problems. National identity, language, cultural and religious issues
are among the problems that are common both for Islamic and Christian
segments of the Hamshen Armenians. The community problems are connected
with organization of community life, schools, cultural organizations,
press, church, etc.

Alvrtsian stressed the importance of creating an international
structure to coordinate the information flow and the discussion of
issues relevant for the Hamshen Armenians.

Armenian communities in Georgia

Head of the Caucasus Studies Department at the Caucasus Media Institute
SERGEY MINASSIAN spoke about the Armenian communities in Georgia. 98%
of the population in Akhalqalaq and Ninotsminda regions in Georgia
is Armenian.

Most of these people live in rural areas. Physical security of this
population is not an issue but their legal status and the social
condition of the Armenian communities is a problem. There are many
political manipulations of the Javakhq issue but Javakhq itself is not
very politicized. The Georgian government’s discriminatory policies
became more obvious after the Rose Revolution in 2003. "Javakhq finds
itself in a situation whereby it cannot defend its interests. The only
way out for Javakhq is to transfer its problems to the international
level," Minassian stated.

Head of the Social Sciences Research Program of Noravanq
Foundation TAMARA VARDANIAN spoke about the Armenian community in
Tbilisi. Armenians have always formed a large share of the population
in Tbilisi. Over 250 thousand Armenians currently live in Georgia.

"The increased lack of trust between the Armenians and Georgians causes
the concern among the Armenian social-political circles. You can easily
see the intolerant, and sometimes openly hostile attitude towards the
ethnic Armenian citizens of Georgia," Vardanian noted. Anti-Armenian
articles are often published in the Georgian press. In the context
of the present close ties between Georgia, Azerbaijan and Turkey it
is impossible to lobby for any Armenian interests in Georgia.

The Armenians in Tbilisi have always been less politicized as opposed
to the Armenians in Javakhq. There are 2 Armenian schools in Tbilisi
and 6 Georgian schools that have Armenian classes. The Armenians
in Tbilisi have to learn Georgian to be able to integrate into the
Georgian society. The Armenian community in Tbilisi is not well
organized. It does not have a leader. The Armenian cultural centers
here are also in a very bad condition.

Preservation of the Armenian identity

The reports were followed by a discussion of the future of the Armenian
communities and organization of repatriation of Armenians.

Director of the Caucasus Media Institute ALEXANDER ISKANDARIAN noted
it is not correct to blame the government for not doing anything to
preserve the Armenian communities. It is necessary to invite experts
and discuss the possibilities for repatriation of Armenians. Of
course, it will be impossible to organize massive repatriation of
Armenians. There were attempts to do so in the Soviet times but most
of the people who returned to Armenia later left it. People have an
idealistic image of the homeland. When they come here they see that
it is not like the homeland they had imagined.

There are many Armenians in Russia who would like to return to Armenia.

These are people who did not manage to adapt to the Russian environment
and find a job there.

Ethnographer HRANUSH KHARATIAN believes not all Diaspora Armenians
will want to return to Armenia. Many Armenians came to Armenia from
Iraq after the war. However, most of them later returned to Iraq or
left for other countries. The Diaspora knows that we are not ready to
accept the Diaspora Armenians. "We have a problem of ethnic survival
in the Diaspora. We want our communities to be ethnic communities,"
Kharatian said.

Member of Yerkir Union ROBERT TATOYAN believes that Armenia is not
ready for repatriation. Even though emigration from the country
has decreased in the past several years it has not been stopped
yet. Tatoyan pointed out three main conditions for improvement of
the demographic situation in the country – decrease of emigration,
growth of the birth rate, and immigration, repatriation of
Armenians. Despite the controversies around adoption of the dual
citizenship, nevertheless, adoption of dual citizenship will slow
down the dissolution of the Diaspora.

Director of Noravanq Foundation Gagik Harutyunian stressed the
importance of a professional structure aimed at preservation of the
Armenian identity, and formation of a common information environment
between Armenia and the communities. Well-planned and organized
repatriation is also very important.

Harutyunian believes no government programs in this direction
can be efficient without involvement of experts. He stated that
the possibility to listen to the opinions of Armenian and foreign
experts on these issues during the conference was one of the positive
accomplishments of the conference.

Another conference on repatriation programs and perspectives will be
organized in the fall of 2007.

NAGORNO KARABAKH ISSUE BECAME MINOR FOR MEDIATORS

PanARMENIAN.Net
25.06.2007 14:31 GMT+04:00

/PanARMENIAN.Net/ Presently the OSCE Minsk Group Co-chairs are engaged
in their own problems in the region and the Nagorno Karabakh issue is
not a priority for them, Kiro Manoyan, director of the ARF Bureau’s
Hay Dat and Political Affairs Office, told a news conference in
Yerevan. "Resolution of the conflict depends on the sides. However,
Azerbaijan is not ready for constructive moves and hopes for
military power and gas. There will be no progress until election
of new President in Armenia, Azerbaijan, U.S., Russia and Turkey,"
Manoyan said.

The Near East is a crossroad of conflicts and Armenia should intensify
diplomatic endeavors to achieve its goals. "The international
community has come to understand that resolution of the Nagorno
Karabakh conflict demands much time. While Azerbaijan had better
understand that the choice is to be made between NKR’s independence
and its joining Armenia.

Talks are held for determination of Karabakh’s status," Mr Manoyan
underscored.

As to the territories marking the NKR security zone, Mr Manoyan
reminded that ARF Dashnaktsutyun is against any surrender. "It
was Azerbaijan to wage the war. We conquered the territories and
created the security belt. Anyway, OSCE MG Co-chairs’ haste is
understandable. They have to justify their activities and prevent
hostilities," he said.

FOREIGN INVESTMENTS IN ARMENIA’S BANKING SYSTEM MAY GROW BY $80 MILLION BY END 2007

ArmInfo
2007-06-18 13:57:00

Total foreign investments in Armenia’s banking system may grow by
$70-80 million, specialists of AmRating agency say. The agency is
a member of Global Rating Group. The specialists forecast at least
six significant transactions with foreign investors in Armenia on
establishment of new banks, investments in the existing banks, and
reorganization of universal credit companies into commercial banks.

Thus, Biblos Lebanese bank is expected to enter the Armenian banking
market.

The bank is intensively negotiating with ITB, one of the local
small banks.

AmRating specialists estimate the transaction at $11 million. As of
March 31 2007, ITB occupied the 20th penultimate position in total
capital ($8.4 million) and the last 21st position in assets ($14.4
million). The bank positions itself as universal however its resource
base is not enough diversified and the provision of crediting is
insufficient. It is noteworthy that the Dutch investors, beneficial
owners of ArmPost, took interest in the bank from the point of view
of creating a PostBank on its basis. AmRating experts say that the
Arab bank actively working in Lebanon and Syria and interested in
the telecommunication sphere in Armenia is likely to have offered
ITB shareholders more favorable conditions actually breaking the
contract with the Dutch. Therefore, the experts do not rule out that
the Lebanese are very likely to overpay $2-3 million for an operating
bank not to establish a Greenfield bank.

AmRating specialists believe that on the example of this transaction,
which has not been effected yet but is still very realistic, one can
speak of the reasonable policy of the Central Banks that corrected the
Order N02 in March 2007. As a result, starting from January 1 2009, the
minimal capital of the operating banks must total at least 5 billion
drams instead of the present 2.4 billion drams. This requirement for
new banks is 5 billion drams. Hereby, the CB stimulates acquisition
of Armenian banks by foreign investors as the local banks suffer
difficulties with capitalisation.

Armimpexbank, one of the country’s oldest banks, experiences something
similar. It will be announced shortly that a Russian investment
company has acquired the bank. The well-known Russian businessman
Ruben Vardanyan is the owner of the Russian company. AmRating
say the bank can be estimated at $12-13 million i.e. a little
more than its total capital (9.3 million) as it has been just
staying up actually for 5 years by the wish of its owner, British
businessman Vache Manukyan. Specialists say that "Troika-Dialog"
considers Armimpexbank a contingency plan. Earlier, it displayed
interest in Converse Bank. However, Eduardo Eurnekyan, an Argentinean
businessman, the concessionaire of "Zvartnots" airport in Yerevan,
acquired the bank for $45-50 million. Paying such a big amount for
one of the leading Armenian banks did not fit into the business
of the Russian company. Intensifying its activity in Armenia,
"Troika-Dialog" will undoubtedly adhere its traditional investment
and not universal banking especially now when the Central Bank has
assumed the uneasy task of capital market development. This niche in
the Armenian market is represented only by Armswissbank, which will
become the only rival of the new investbank so far. Nevertheless, this
competition will be of conditional nature in mid-term outlook due to
the poorly developed capital market, first of all, and the different
investment interests. The "Battle of Gigants" of banking retail that
intend to enter the Armenian market will become an important event
in the country’s banking system. These are Raiffeisenbank Austria and
the international microcrediting bank ProCredit. Both are very strong
in consumer loans and their entry into Armenian market may turn into
a tough competition with the existing banks.

Thus, ACBA Credit Agricole Bank, the natural monopolist in the sphere
of farming economies, will undoubtedly take interest in ProCredit. The
latter is represented in 19 countries and has up-to-date technology of
micro crediting, especially in processing of agricultural products
and small business. ProCredit is well-informed of the Caucasian
business conduct as it has launched rather successful activity in
neighboring Georgia.

To all appearances, Raiffeisenbank Austria resolved to make a right
step – to purchase the whole package of shares of the Areximbank
(Armenia) from the structures of Boris Ivanishvili, a Russian
oligarch. This became possible after the Austrian Raiffeisen group
purchased for $550 mln the shares of the Impexbank, the leader in
the Russian banking retail, belonging to B.Ivanishvili and being the
head company for the Armenian branch, in the beginning of 2007. It
is planned to complete the legal integration of Raiffeisenbank
Austria and Impexbank OJSC by the end of 2007. The conditionally
called "Raiffeisenbank Armenia" will become a direct competitor
of Ardshininvestbank, Armeconombank, and HSBC Bank (Armenia), of
course. At the moment, Areximbank has rather stable positions in the
sphere of not only corporate, but also retail crediting, it is also
the leader in the autocrediting market.

The entry of Gazprombank (which has filed an application for setting up
an Armenian branch) into the Armenian market will become a remarkable
event for development of strategic directions of the Armenian
economy. According to GlobalRating’s data, it is one of the largest
Russian banks by all the important directions of banking service
and the authorized bank of the Gazprom OJSC. The Gazprom OJSC is the
key shareholder of the bank and it has an opportunity to completely
control the bank’s activity. The bank with its shareholder in the
regime of strategic partnership, however, it develops its activity
in the field of corporate, retail and investment business quite
successfully. Gazprombank will no doubt become a direct competitor of
the VTB-Armenia Bank, which has lately been activating its work in the
sphere of financing strategically important fields of the Armenian
economy, including the energy sector. AmRating analysts consider
Gazprombank’s interest in Armenia to be connected with Gazprom OJSC’s
energy investment programs worth a total of about $2 bln in Armenia,
and it is natural that a financial structure authorized by Gazprom
and depending on its politically motivied decisions should operate
with these funds in the country.

As for creation of PostBank in Armenia, Dutch investors will probably
have to build a bank from the very beginning, though there are 1-2
banks in the market that can be of some interest. One of the most
probable pretenders is the Prometey bank.

Aspiration for reorganization of the so-called credit companies into
commercial banks may become a remarkable tendency of development of
the financial services market in the country. According to experts,
this is connected with an obvious lack of resource base in the most
successful credit companies, which failed to stand competition with
banks when the retail crediting market started developing. Therefore
the lists of the Armenian commercial banks may shortly be enlarged
with conditional names of and . It is not ruled out that the First
Mortgage Company universal credit organization will be reorganized
into a specialized mortgage bank.

AmRating specialists consider the political stability, high indices
of economic growth, regulator’s successful measures for reforming
of the system to be the fundamental factors of considerable increase
of foreign investors’ interest in the banking system of Armenia. The
specialists of the agency think that despite the growing competition
in the sphere of highly profitable banking services, the level
of their penetration in the country is still rather weak, and the
need in raising capitalization and the acute shortage of long-term
resources keep the banks in constant search of additional resource
base and strategic investors. , the Executive Director of AmRating,
Emmanuil Lazarian, emphasized in his conversation with ArmInfo
correspondent. According to him, in 2007 the Central Bank of Armenia
will start reaping the fruits of the policy on financial recovery
of the banking system and its transmission to the stage of intensive
development on the basis of the latest international tendecies. This
policy was launched as early as 2000.

30-KM SECTION OF THE HIGHWAY SURROUNDING SEVAN TO BE LEFT UNDER WATER IN 2034 BY LAKE’S RISING LEVELS

ARKA News Agency, Armenia
June 18 2007

YEREVAN, June 18. /ARKA/. Derenik Hovhannisyan, Gegharkunik provincial
administration urban planning chief, speaking Saturday at a news
conference, said a 30-km section of the highway surrounding Sevan
Lake will be left under water in 2034 as a result of the lake’s
rising levels.

In his words, after water level rises by six meters, all houses
and roads below 1908.98 thousand meters above the sea level will be
flooded by 2034.

Hovhannisyan said that the flooded sections of the road will be
replaced with others.

"Construction hasn’t started yet because threat of flood is not posed
to the roads for coming five to ten years", he said.

The official also said that it is banned to build houses on these
areas and to lease these territories for more than three years –
that’s why the government won’t compensate losses.

The program of Sevan restoration and protection envisages the lake
level rise. The water level is planned to be raised by six meters
over 30 years.

The program was approved in 2002. As a result of this program
implementation, the lake’s level has been increased by two meters
over a period between 2002 and 2007.

In 2005, it went 41centimeters up to 1898.07 meters against 1897.66
meters in 2040.

The water level has risen 20 centimeters over a period between June
2006 and June 2007.

PETER SEMNEBY: IT’S NECESSARY TO REGISTER PROGRESS BEFORE THE PRESIDENTIAL ELECTIONS

ArmRadio.am
18.06.2007 15:28

Elections always complicate any sensitive negotiation process,
especially like the process of the Karabakh conflict settlement,
EU Special Representative for the South Caucasus Peter Semneby told
ArmInfo correspondent.

"We already witnessed the suspension of the negotiation process before
the parliamentary elections in Armenia. Much effort was needed in the
last few weeks for the resumption of the negotiation process. Chances
of reoccurrence of the situation are great. That is why it is necessary
to use the current opportunities to reach progress before the start of
the presidential campaign in Armenia," the EU Special Envoy noted. He
confessed that the situation is complex because the presidential
elections in Armenia will be followed by elections in Azerbaijan. "The
European Union is interested in the continuation of the negotiation
process. We hope that the conflicting sides will take greater efforts
than in the first half of the year," Peter Semneby noted.