Very Poor Mark To OSCE MG And Excellent Mark To CIS IPA

VERY POOR MARK TO OSCE MG AND EXCELLENT MARK TO CIS IPA

Regnum, Russia
June 29 2006

REGNUM introduces interview with CIS Inter-Parliamentary Assembly
Secretary General Mikhail Krotov.

REGNUM: In the context of the growing controversy over the efficiency
of the CIS as a structure who should not only integrate states but
should also solve their real problems, what do you think about the
CIS efficiency, to what an extent has it solved its primary tasks
and directions?

The most important achievement of the CIS – an accomplishment
that justifies its very existence – is that it has prevented the
"Balkanization" of the USSR collapse, i.e. has become an excellent
instrument of civilized divorce.

The CIS has done one more crucial thing – it has stopped all military
actions in the post-Soviet territory. I mean the conflicts that
were not the immediate result of the USSR death but already existed
when the Union was yet alive. Today, if not yet resolved, these
conflicts are "frozen," i.e. there are no more military actions in
the areas once ridden by war. And this is certainly one of the CIS’
key achievements. Speaking specifically, of the post-Soviet conflicts
the CIS has managed to fully resolve the internal Tajik conflict. By
the way, this is almost the only precedent in the world when a serious
conflict has been fully resolved.

Unfortunately, this peacemaking success of Russia, its partner
Iran and, certainly, Tajikistan has not been given an appropriate
assessment to date. Today, many people are receiving Nobel awards for
less important things – for planting trees in Africa, for just wishing
to stop military actions (for example in Palestine) and so on, while
here we deal with a civil war, real war, serious war stopped in the
best possible way: today the Tajik opposition peacefully cooperates
with the majority in the parliament. This is a specific example of
the CIS peacemaking efficiency. I can also give other examples of
the CIS effective peacemaking: the stoppage of military actions in
South Ossetia, Abkhazia, Transdnestr and Nagorno-Karabakh. Of course,
in some cases this peacemaking has not been finalized, but this is
not the CIS’ fault. Simply, the West has pressured it into giving
its intermediary functions to other structures like the OSCE who are
still unable to cope with their peacekeeping task.

So, I think that when assessing the CIS efficiency we should not
speak abstractly but should compare its work with the activities
of other international organizations. For example, starting its
peacemaking in Nagorno-Karabakh in September 1993, on May 5 1994 the
CIS Inter-Parliamentary Assembly (IPA) already signed the Bishkek
cease-fire agreement, while the OSCE Minsk Group has failed to do
anything tangible in the following 12 years. So, we should grade the
work of the OSCE MG as very poor and that of the CIS IPA as excellent.

However, given the present misunderstanding and even confrontation
between the CIS and other international organizations, they in the
world refuse to admit that the CIS is the key positive negotiator.

Still, the CIS has turned out to be even more efficient than the USSR
who proved unable to resolve its own conflicts till its very collapse.

Moreover, it is exactly the CIS who has allowed the post-Soviet
republics to establish much stronger economic, political and
humanitarian ties than ordinary independent states usually have.

Particularly, the CIS has formed a zone of free trade, which has
stimulated the internal CIS trade to grow quicker than the CIS’ trade
with other foreign countries. Whatever their political orientation,
the CIS countries are dynamically developing their trade with Russia.

In 2005, the trade turnover between Russia and Georgia grew by
50%, with Ukraine by 1/3, while the summary trade turnover of
the four CES countries was more $109bn. This all is due to the
Free Trade Zone Agreement. Of course, this agreement might be
more integration-oriented, more advanced, but politics is an art
of possible, and when today some people are criticizing the CIS,
this is not criticism of the CIS as such but reaction to unrealized
unreal expectations.

REGNUM: Much is being said about the need to reform the CIS. How
can these reforms affect the parliamentary component of the CIS
cooperation, particularly, the IPA?

Naturally, in the course of time the components of the CIS are
changing. Consequently, the CIS should have different forms and methods
at different stages of its development. The government forms applied
in the CIS so far were supposed to meet the primary tasks: first,
to preserve the economic, political and humanitarian community and,
second, to overcome the deep economic crisis. Naturally, in the
first decade of its existence the CIS showed slumping parameters,
which could not be taken positively or cause envy or, at least,
interest in the world. However, in the last five years the situation
has turned around: the CIS countries are finalizing their statehoods,
are completing their basic economic reforms, are showing steady
economic growth – the world’s highest growth in the last five years.

And now the CIS should be regarded as a structure that can effectively
promote cooperation and ensure a new quality of interaction in our
complex, globalized, competitive society.

Thus, today we should look for new forms and ways to govern the CIS –
ways that are adequate to progress rather than crisis. However, if we
want to carry out actual reforms we should reform not only the CIS as
an inter-state structure but also the governmental structures of each
member-state. The CIS reforms without adequate change in the attitude
of the member governments to this structure will give us nothing. For
example, which parliamentary structure is responsible for cooperation
with the CIS in Russia? Special committees in the State Duma and the
Federation Council. Do the speakers deal with this problem? Yes, they
do through their committees. The prime minister also deals with the
same problems and the president spends a great deal of time on them.

But where is that basic ministry that should be responsible for the
success or, on the contrary, the failure of our cooperation with the
CIS? We have no such ministry, at all. Thus, responsible for the CIS
in Russia is everybody and consequently nobody. However, in the first
decade of crisis, Russia had a special ministry on the CIS. The other
CIS states also had such ministries. That is, there was a system of
specialized ministries, and the CIS bodies, just like international
bodies, were based on this system. When Russia decided to abolish the
ministry, the other CIS states followed suit. And now the CIS bodies
have no basis for work. So, we should start reforming the CIS from
reforming the authorities of its constituent states.

To say that the CIS bodies are super-national is not a panacea. It
is extremely important that the national governments form structures
responsible for CIS cooperation. That is, this should be a two-sided
process. The parliamentary component should not stand still either.

It should also reform, especially now that the role of parliaments
in the CIS is growing: in Moldavia and Ukraine they are the leading
government branch, while in Armenia the prime minister cannot resign
without the parliament’s consent. However, inter-parliamentary
reforms have their peculiarity, and the great contribution of the
CIS IPA is that it has made possible multi-level and multi-speed
integration. Thus, if on the executive level the ideas of customs
union and military-political alliance required forming special
structures, on the parliamentary level, the CIS IPA alone represented
the parliamentary component of both the CSTO and the CES.

For over five years, the CIS IPA even acted as the administration
of the parliamentary assembly of the Customs Union (now the IPA
EurAsEC). By developing multi-level and multi-speed integration in
the framework of our assembly, we kind of openly show: look, how fine
it is in the CES, how good it is in the CSTO. And parliamentarians
from the non-member-states, for example, Azerbaijan, take interest in
the activities of the CSTO and the CES, who thereby promote their own
image in the framework of the CIS. This is really important. Besides,
we have drastically new development directions, for example, democracy
support over the CIS territory. We in the CIS IPA have set up a
special international institute for monitoring the development of
democracy, parliamentarianism and voters’ rights protection in the
CIS IPA member-states. This institute is supposed to summarize the
positive democracy development experience of our countries.

We have done much, and now we should sum up the results and work out
recommendations to the CIS states and, first of all, parliaments on
how to propagate this positive experience. Of course, the institute
will constantly monitor legislations, observe elections, promote the
training of highly-qualified national and international observers. I
think that this institute will raise our image in the eyes of the
international community. We are working to this end. We are planning
to open the institute’s branches in many CIS countries and to monitor
democracy on a national level. This will be an unprecedented democracy
monitoring mechanism. The CIS parliaments have already expressed
interest in this project; the institute is already existent and is
actively developing.

Hence, one of the peculiar ways to reform the CIS IPA is to structure
such independently developing special micro-assemblies.

There are precedents of such activity in the world: some of the EU
countries are members of the Euro zone, some are not, some countries
are members of the Schengen zone, others are not, but this fact has
never led to the EU collapse, has it?

At the same time, reforming the CIS in no way means just reforming
its administration. Administration is the last thing to be reformed.

Administration should be adjusted to the goals and tasks set by its
"employers," i.e. the CIS states. If they fail to agree on the model
of the CIS should have – an optimal effective model that would please
everybody – they will never agree on the administration to serve
this model.

REGNUM: The CIS has got the "reputation" of an organization adopting
model laws that are not later applied by its member-states – is this
true? Could you say what percentage of adopted CIS laws has been
enforced (if there are such statistics, of course)?

I think that today the key problem of the CIS is that people know very
little about it. Just for a test, I have asked the most respected
Russian MPs: "what international organization ensured cease-fire in
Nagorno-Karabakh in May 1994?" Most of them could not answer this
question. What is this? Ban on information? Where is this information
vacuum from? It looks a bit strange that, being the kernel of the CIS,
Russia is doing nothing to propagate the CIS’ positive role, at least,
in its territory. Meanwhile, it was exactly the CIS IPA who put an end
to the long complicated six-year war in Nagorno-Karabakh. Our deputies
constantly crossed the front line during military actions, met with the
conflicting sides, worked through each letter of the Bishkek protocol
signed by the parliamentary speakers of the conflicting sides and
CIS IPA and Russian representatives. Perhaps, the reason is that
this time mediating were parliamentarians rather than diplomats,
as is usually the case.

Why do they ignore this achievement? I don’t know why. I would
understand if somebody in Brussels or Washington said he they are
unaware of this (by the way, those who should be aware are well
aware), but I am really surprised to see that many people in Moscow
and St. Petersburg are completely unaware of this. In Yerevan and
Baku everybody is aware, in Moscow and St. Petersburg – nobody. Why
isn’t this mentioned in history text-books? I don’t understand such
ignoring of the CIS accomplishments.

I would like the visitors of your site to know that it was exactly the
CIS IPA who ensured the signing of the Bishkek Protocol, a document
that, first, put an end to war in the region and, second, liberated
all POWs and hostages. Yes, the next stages of the conflict resolution
remained unrealized, but this is not our fault, this is our trouble
– our mediator functions were given to the OSCE Minsk Group who has
failed to attain any results in the past 12 years.

As regards model laws that stay just on paper on the national
level – this is just a gossip. Who is spreading such gossips? Why
are we still following the principle: everything good is overseas,
everything bad and useless is at home. Who said that the CIS IPA model
laws are impracticable? The EU model laws really are – they can’t be
applied in Russia or the other CIS countries simply because they do
not exist. When there is no law nobody criticizes it, but when you
systematically work to draft legal documents, there are always people
who criticize you.

Meanwhile, the civil codes of all the CIS countries, except Georgia,
are based on the model civil code of the CIS IPA. The other examples
are the laws on securities market, on electronic digital signature
and many others.

Our western partners, such as EBRD, are constantly advertising
our model laws and showing how important they are for attracting
investments and developing market relations. If something has no
analogue, why just up and say it can’t be effective?

Perhaps, many fail to understand how the CIS that is not a
super-national organization, can control integration processes and
promote some positive developments in its member-states. At the same
time, it certainly has levers of control over its member-states. The
first lever is agreements, conventions, and protocols. Once in force
they get constitutionally obligatory and, consequently, can have a
serious influence on the development of our relations in various
spheres. For example, we have an agreement on a free trade zone,
an agreement on cooperation against terrorism, an agreement on
humanitarian cooperation (adopted during the last CIS summit in Kazan).

The second lever is exactly model laws. By adopting their national
laws on the basis of general model ones, the CIS states bring their
laws into harmony. It is due exactly to our 150 model laws that the
CIS countries are now so close and together.

With every year our model law-making is becoming increasingly
essential. For example, in his last address the Russian President
emphasized the demographic problem. One solution to it is attraction
of migrants from the CIS countries. This way is even more effective
than stimulating birth and fighting high mortality. The question is
about creating necessary (legal) conditions for Russian-speaking CIS
citizens to come and work in Russia. Until recently, we were more
inclined to fight illegal migration, while now we should find some
effective balance between fighting illegal and stimulating legal
migration. We should, fist of all, stop addressing this problem
spontaneously. This is our specific task. Today, many CIS countries
have an excess of jobless labor force. This is a constant source
of social tension for them. In the previous years, this tension was
overcome spontaneously: simply, all those people migrated to Russia,
earned money here and sent it back to their countries. Now we should
regulate and legalize this process, we should create conditions for
those people, protect their rights. After all, we should give them a
chance to become Russian citizens. On the one hand, this will allow
some CIS countries to reduce their excessive populations and high
unemployment rates (something they certainly want), on the other,
this will allow Russia to improve its demography. This is a very
important problem and the CIS is simply indispensable here.

REGNUM: Today relations between some CIS countries are worsening and
turning into a kind of trade "war." Does the CIS have normative or
other rules to regulate bilateral trade and to give a legal assessment
of the "wine" and other passions?

First of all, trade wars are a normal thing – you can see them waged
even in such international organizations as the EU and the WTO.

Second, there are rules of how to wage such wars. If a supplier
country offers low quality, ecologically unsafe production, any other
country has the right to embargo its import into its territory. What
is happening in the CIS now is mostly because local trade is growing.

When supplies were small, the CIS countries, including Russia,
did not give much attention to the quality, but now priorities have
changed. Russia is a rich country, it has many buyers, and it gets
lots of various products. Naturally, we are beginning to choose. 60%
of Georgian wine is below standard. So, who in the world would let such
a product into his territory? However, the same rule is applicable
to Russian products which find it very hard to rival with Turkish
goods in Georgia.

REGNUM: What do you think about the parliament vector of CIS
cooperation?

So far, there has been no single case of any national parliament
refusing to ratify any CIS inter-state agreement or convention. Some
president suggests a convention that will improve CIS relations and
his parliament objects to it? – We have seen no such examples in
either Ukraine, or Georgia, or Moldova. There were some examples
of governments failing to submit CIS documents for parliamentary
ratification – when they just get the document, sign it and put it
aside. However, we in the CIS IPA obligatorily consider such cases
and look which country has failed to ratify which agreement and why.

I assure you that our parliaments perfectly understand the need
and do their best to ratify and enforce such agreements. The other
example is when our parliaments express their position on acute
political problems. For example, our governments failed to work out
official assessments of such events as the bombing of Yugoslavia,
the war in Iraq, while the CIS IPA did not (by the way, Ukrainian MPs
have always been the most "anti-NATO" in the CIS). Here the CIS gets
serious foreign political support from the IPA, especially as having
legal superiority over the other CIS bodies. The IPA can represent the
CIS parliaments in relations with other international organization,
sign international agreements on their behalf (something the CIS
Executive Committee cannot, unfortunately, do).

Today we have partner agreements with all leading parliamentary
structures of the world.

REGNUM: Why are there only Russian soldiers keeping peace under the CIS
mandate in the South Ossetia (and not, say, Armenians or Kazakhs),
which gives Georgia the right to hold forth about partiality of
the mission?

When the Council of Ministers of the CIS – exactly the CIS – decided
to send peacekeepers to this conflict zone in Georgia, they planned
to enroll not only Russian but other CIS soldiers, too. I personally
witnessed how the chairman of the council, Russian Defense Minister
Pavel Grachyov, gave specific directives to his colleagues – send an
Armenian detachment, a Kyrgyz platoon, etc. Unfortunately, none of
the CIS countries, except Russia, has fulfilled its commitments to
form an international peacekeeping force. So, Russian peacekeepers
are alone in Georgia not just because Russia wants to be alone there,
but because nobody else has sent his troops there. This is Russia’s
trouble that nobody is helping it in this hard mission. In Abkhazia’s
Gali region alone we have already lost almost 100 peacekeepers. Of
course, there are examples of collective CIS forces. On January
22 1993, the Council of Heads of States decreed to form collective
Russian-Uzbek-Kazakh-Kyrgyz forces for protecting the Afghani-Tajik
border. And again it was the parliamentary component that played a
decisive role in the matter: if the Uzbek battalion was sent to the
Afghani-Tajik border right after January 22 1993, the parliaments
of Kazakhstan and Kyrgyzstan first refused to fulfill the decision
alleging they could not send their forces to a hot spot. And only
after the CIS IPA’s interference (we organized a number of actions –
our Defense and Security Commission led by Sergey Stepashin arranged
a number of visits of MPs to the border), the Kazakh and Kyrgyz
parliaments reviewed their position.

Today it is especially important that the composition of international
peacekeeping forces be coordinated with conflicting sides, but,
in this particular case, we should only thank Russia for fulfilling
its peacekeeping commitments and regret that the other CIS countries
do not.

REGNUM: Is the CIS IPA going to more thoroughly examine the status
of the unrecognized republics – Abkhazia and Nagorno-Karabakh –
based on the Montenegrin and Kosovan precedents?

As regards the status of these unrecognized states and the general
resolutions of these conflicts, I would like to say once again
that the conflict in Abkhazia is being resolved by the UN and the
conflict in Nagorno-Karabakh – by the OSCE. That’s why although the
CIS IPA was at the very root of these peace processes (we once had
peacemaking groups on Abkhazia and Nagorno-Karabakh), today we can’t
discuss the status of these autonomies without interfering into the
activities of the relevant mediators and hindering the peace processes
they mediate. We will address these problems (as we successfully did
before) only if we are instructed to do it once again.

REGNUM: What did Russian President Vladimir Putin mean when he said
in Yerevan that the CIS is a mechanism of civilized divorce of the
post-Soviet republics? Is this exactly what the IPA is meant to do?

What Putin said in Yerevan does not mean that what he said before and
after is not true. Simply, in that particular situation he pointed
out just one moment of the CIS activities – its contribution to the
civilized divorce of the post-Soviet republics. The selfsame Putin
has said hundreds of times that it is important to integrate the
already divorced and really independent CIS states. Simply media gave
more attention to Putin’s words about civilized divorce than to his
other statements, including his official addresses to the Federal
Assembly. You can pick up one phrase from the general context of a
leader’s statements and make quite erroneous conclusions about his
policy. As regards Putin’s position, he believes that the CIS is an
absolute priority in Russia’s foreign policy.

REGNUM: Have you managed to make the CIS IPA a tribune for discussing
and finding ways to solve the urgent problems of the post-Soviet
republics? If yes, could you, please, give examples, if not – explain
what has caused the failure?

First of all, for many years the CIS IPA held annual St. Petersburg
economic forum. It was during these very summits that we worked and
later carried out many interesting large-scale ideas.

The CIS IPA has also organized a whole number of international
high-tech congresses, which have boosted progress in, say,
communication systems. Here we very effectively cooperate with the
Regional Communication Community. During the regular meeting of our
joint expert council, which I chair, we try to provide legal basis
to various innovations in this sphere.

The point is that many officials still fail to understand that in the
market economy and democratic society one should live not according to
orders and decrees, but according to laws. That’s why it is necessary
to give everything a normative-legal form, i.e. to carry out policies
through the parliament. By increasing the number of laws we decrease
the number of loopholes for officials, reduce corruption.

That’s why we face resistance. Those criticizing the CIS IPA and our
national parliaments are just unwilling to build a legal state and
to act by the law. By the way, in the last five years, Russia has
made big progress exactly because President Putin actively encourages
legislation. We can only commend the State Duma for its legislative
activity. It is better to have not very perfect law than not to have
law at all. Unfortunately, in many spheres we are still in legal
vacuum. Just for comparison: the US contract economy is regulated
by 10,000 federal laws. Just imagine how far we are still from the
US legal balance level – the level we should seek to attain. If we
attain it, we will have democracy: society will be interested in
using laws to develop business and other spheres of the state life.

REGNUM: Since recently, some CIS countries have begun to form
alternative unions and blocs. The best-known one is GUAM. Aren’t you
afraid that the GUAM countries will use the CIS IPA for achieving their
coordinated goals to serve the interests of GUAM – an organization
that is, in fact, alien to the CIS?

For our countries the participation in the CIS is compatible with the
participation in the OSCE, the Council of Europe, etc. The same is
true for GUAM. The question is if the CIS may split into GUAM and
EurAsEC? I am sure this will never happen. First, if GUAM decide
to withdraw from the CIS, they will thereby show their reluctance
to cooperate not only with Russia – their key trade partner – but
also with the other CIS countries. Second, the key goal GUAM has
been set up for is yet impracticable – the transport corridor from
Azerbaijan via Georgia, Ukraine and Moldova to Western Europe. I am
not saying that this idea has no right to exist – simply there must
be alternative rival corridors. The US has caused big damage to GUAM
by first lobbying and then financing the Baku-Ceyhan project. And now
the oil that was supposed to go via the Odessa-Brody pipeline is now
going via Turkey. Thus, for the time being, the idea of GUAM has just
no sufficient raw material basis.

TBILISI: Armenia Not To Meddle In Problems Of Samtskhe-Javakheti Reg

ARMENIA NOT TO MEDDLE IN PROBLEMS OF SAMTSKHE-JAVAKHETI REGION

Daily Georgian Times, Georgia
June 28 2006

Minister of Foreign Affairs of Armenia Vardan Oskanyan, being on an
official visit to Georgia, says Armenia won’t interfere in resolution
of Samtskhe-Javakheti region problem, Parliamentary Speaker of Georgia
Nino Burjanadze stated shortly after the closed-door meeting with
the Armenian high-ranking official.

As per Burjanadze, Vardan Oskanyan reiterated the stance of Armenia
with regard to Samtskhe-Javakheti region, that present situation in
the region is domestic affair of Georgia and hence, Armenia won’t
meddle in this matter.

Nino Burjanadze stressed that the parties focused on deepening
Georgian-Armenian economic relations and Parliamentary ties. She
also said that according to Oskanyan, Armenia recognizes Georgia’s
territorial integrity and supports peaceful settlement of conflicts,
as well as resumption of a political dialogue.

As to construction of Kars-Akhalkalaki trunk railway, the sides have
not highlighted the mentioned issue, Burjanadze said.

Yerevan Ready To Make Public "Karabakh Folder" In Response To U.S. R

YEREVAN READY TO MAKE PUBLIC "KARABAKH FOLDER" IN RESPONSE TO U.S. REPRESENTATIVE’S REVELATIONS

DeFacto Agency, Armenia
June 25 2006

"The items of a frame agreement on the conflict settlement made
public by the new U. S. Co-Chair of the OSCE Minsk group for the
settlement of the Nagorno Karabakh conflict Matthew Bryza are only
certain elements of the document proposed to the parties that do
not reflect the essence of the draft agreement, which has become the
result of inappropriate comments", RA President’s Spokesman Victor
Soghomonyan told REGNUM Information Agency.

In his words, "in any case, if the revelations of the kind appear
in the mass media in the future, the Armenian party will make public
all the documents discussed at the talks for the last seven – eight
years". "In part, the matter concerns a draft agreement on the
principle of "a common state", a document discussed in Bucharest
not long ago. I am convinced everything will become quite clear
then. By the way, it was the Azeri party that rejected all the three
projects", Soghomonyan stated. Touching upon AR President Ilham
Aliyev’s statements, RA President’s Spokesman noted, "We believe it
inappropriate to periodically comment on the utterances, which are
different in their form, however, similar in content".

Vahan Zatikyan’s Son Killed

VAHAN ZATIKYAN’S SON KILLED

ArmRadio.am
22.06.2006 18:10

"Radiolur" learnt some minutes ago that Sedrak Zatikyan, son of the
former Head of Malatia-Sebastia community of Yerevan, ex-Deputy of
the National Assembly Vahan Zatikyan, was killed in the same community.

According to our information, fire was opened at his car, which lost
control and crashed into another vehicle. Sedrak Zatikyan died in
the hospital. He is married and has children.

An accidental passer-by, Karine Sargsyan born 1969, was also killed
in the result of the accident. There are no versions about the crime
so far. A criminal case has been launched on the fact of murder. The
investigation is carried out by the Prosecutor’s Office.

OTE Publishes Shortlist Of Companies To Pass Second Round Of Tender

OTE PUBLISHES SHORTLIST OF COMPANIES TO PASS SECOND ROUND OF TENDER FOR SALE OF ARMENTEL SHARES

Noyan Tapan
Jun 22 2006

YEREVAN, JUNE 22, NOYAN TAPAN. The OTE company (Greece) on June
22 published the shortlist of four companies that will be allowed
to participate in the second round of the tender for sale of 90%
of ArmenTel’s shares. According to a press release of the company,
these are the Russian companies Vimpelcom and Mobile Telesystems (MTS),
a group of telecommunication companies operating in the Persian Gulf
region – ETISALAT-Emirates Telecommunications Corporation/Istithmar
ETV-Emergent Telecom Ventures, and VTEL Holdings/Knightsbridge
Associates Corporation, about which the press release does not provide
any information.

Foreign Investments In First Quarter Up 57%

FOREIGN INVESTMENTS IN FIRST QUARTER UP 57%

Armenpress
Jun 21 2006

YEREVAN, JUNE 21, ARMENPRESS: Armenian national statistical service
said the volume of foreign investments in the real sector of
Armenian economy in the first quarter of the year amounted to $94.3
million. This figure does not include investments received through
the government and banks. The volume of investments was 57 percent
more from a year ago.

The committee said the amount of direct investments in the economy
was $45.4 million, 27 percent up from a year ago. The committee
said 50 percent of foreign investments in this time span went to
the communications sector. They made accordingly 31 percent of all
direct investments.

Twenty-seven percent went to metallurgical industry and 10 percent to
aviation. Also 6.3 percent went to restaurants and hotel businesses
and 8.3 percent to production of beverages. The rest went to energy,
construction and some other sectors.

Manvel Badalyan Is Under Moral Pressure

MANVEL BADALYAN IS UNDER MORAL PRESSURE

Lragir.am
21 June 06

The Council of Civil Service cannot face all the 42 government agencies
alone, stated Manvel Badalyan, Chair of the Council, June 21 at the
National Press Club. And in order not to face the government agencies
alone, Manvel Badalyan anticipates the practical assistance of the mass
media to reveal the drawbacks in the system of civil service. Manvel
Badalyan admits there are drawbacks, and they are inevitable because
it is a new system in Armenia. The system of civil service is four
years old. Within these four years, says Manvel Badalyan, 8 amendments
were made to the civil service legislation.

"These are made and will be made in the future as well to eliminate
the loopholes that emerge often. Our people are very gifted," says
Manvel Badalyan. According to him, it is difficult to predict what
a person may do. Manvel Badalyan confesses that in appointing civil
servants subjectivity of ministers and heads of agencies is a problem
in all the ministries and government agencies in Armenia. However,
the chair of the Council of Civil Service says they try their best to
hold fair examinations for the minister and heads of other agencies
to see and give up nepotism because at any rate they have to pass an
exam to get the post. Manvel Badalyan says the situation has changed,
and the ministers realize that nepotism does not work any more. "You
always ask is there pressure? There is no pressure. Where must pressure
come from? If the political government of the Republic is the champion
of this system and made a political decision to introduce this system,
who should make pressure?" says Manvel Badalyan. According to him,
pressure is only moral, it comes from neighbors and acquaintances. They
expect to get some post without thinking that Badalyan is faithful to
justice and law only. Manvel Badalyan says he likes his work and does
not imagine someone who would like it more. The chair of the Council
of Civil Service does not even hide the reason for his devotion. He
says he feels good when he cracks down on fraud in appointing civil
servants and clears the way for the worthy.

Statement By Vahram Nercissiantz Chief Economic Advisor To The Presi

STATEMENT BY VAHRAM NERCISSIANTZ CHIEF ECONOMIC ADVISOR TO THE PRESIDENT OF ARMENIA AT IMF/WB DUTCH CONSTITUENCY MEETING

Armenpress
Jun 18 2006

Ladies and Gentlemen

On behalf of the President’s office, I wish to welcome our
distinguished guests and colleagues to Armenia for the IMF-World
Bank Dutch Constituency Meeting. We hope you will have a memorable
stay in our small Republic, and will share with us your experiences
in economic management and development.

Experience has shown that economic development requires growth and
growth requires stability.

Experience has also shown that whilst stability is necessary for
growth, it is not sufficient.

Ultimately, private and public investments generate growth, and
poverty reduction is best achieved through growth by investing in
people, and promoting a free and competitive business environment so
that investments are made and jobs created. Fiscal policy, therefore,
must have a long-term growth strategy without impairing macroeconomic
stability. This requires increasing efficiency in public expenditure,
and efficient revenue enhancement, particularly in tax administration,
and efficient use of external aid.

This, in a nutshell, is President Kocharian’s strategy for country
economic management.

The results are clear. The economy has been stable as the annual
inflation rates since 1998, when President Kocharian was elected,
have been around low single digits, and the national currency, Dram,
has been the most stable currency in the Region for several years. The
economy has been growing steadily from 1994 to 2000 around 5.5%
annually; and then since 2001 the economy has been growing around 12%
annually; and last year the economy grew at 14%. We expect another
double digit growth rate also for this year.

And most important of all: poverty has declined from 56% in 1998 to
around 25% and it continues to decline rapidly.

Looking into the fiscal space, we see increasing efficiency in public
expenditures through privatization of public utilities, and parastatal
enterprises, and dramatic reduction and targeting of subsidies. Today,
over 80% of the economy is private, and growing, both in terms of GDP
and employment. The remaining public sector, mainly physical and social
infrastructure, is top priority and is developing rapidly through
IDA assisted projects, where Armenia’s performance, in both progress
of reforms and implementation of project portfolio, is ranked number
one amongst all IDA countries. We are told that this IDA score is a
composite of many factors, including institutional development, fiscal
management and social development. Clearly, government’s expenditure
program is the poverty reduction strategy, endorsed by all donors,
underpinned by a medium term expenditure framework, and, of course,
annual budgets debated and approved by the Parliament. Looking forward,
the Administration is strengthening public expenditure management,
strengthening social safety net, and increasing public investment to
support private sector growth. And these objectives will be integrated
further when we update the PRSP later this year.

With respect to efficient revenue enhancement measures, particularly
taxes, the picture is not as strong. Annual tax collections have been
only around 14.5% of GDP (or around 17.5% of GDP if social security
payments are included) mainly due to tax evasion. Mobilization
of private sector savings by the commercial banks have also been
rather low as loan assets of the entire banking sector comprise only
around 8% of GDP. There are several reasons for this, including lack
of confidence by depositors, and then lack of borrowing interest by
creditworthy enterprises, that finance working capital, and sometimes
capital investments, through internal cash that they accumulate by
evading taxes. Moreover, equity markets have not yet developed mainly
because of closed family driven and opaque corporate governance. Greed
and vanity have sometimes induced deviations from economic policy
causing waste and misallocation of scarce resources. Simply said,
abuse of both power and freedom during this rapid economic transition
has at times obstructed implementation of otherwise sound economic
policies. If unchecked, such deviations will distort the markets,
undermine economic performance and create serious economic and social
problems. Clearly, country economic management must be driven by
policy and not transactions.

President Kocharyan’s Administration, therefore, has undertook
decisive measures to improve governance to enhance efficient resource
mobilization in both public and private sectors. For efficient
mobilization and allocation of public resources, the strategy now
calls overhaul of the government machinery through a comprehensive
civil service reform program so as to substantially reduce waste and
corruption, and to reform administration of taxes and customs. In fact,
the 2004-2006 Tax and Customs Reform Plan has already yielded some
modest improvements in revenue mobilization, but we recognize more must
be done. For mobilization of private resources, the strategy calls for
an extensive and coordinated set of measures to simplify administrative
procedures and remove obstacles to trade and investment, and encourage
development of the enterprise sector through open and transparent
corporate governance and thus enhance confidence that is necessary for
the financial sector to mobilize savings into investment. In short, the
strategy here is to substantially reduce the cost of doing business,
so as to enhance Armenia’s competitiveness in the global economy.

Clearly, reforms in Armenia require a great deal of personal
sacrifice and behavioral modification by all of us during transition,
and benefits of the reforms are not immediately available to all
segments of the population at this stage. We are determined, however,
to continue to implement the reforms through democratic processes of
open debate and due process of law. We believe reforms implemented
through democratic institutions are more stable and sustainable, and
enhance public confidence. By improving the business and investment
climate through reform of public and corporate governance, and with
additional foreign and domestic private investment, we expect to
maintain our high economic growth rates for this decade and with
progressive distribution of the yields of that growth, the benefits
of the reforms will be appreciably felt by the entire population
through gradual improvements in quality of life.

Thank you for your attention.

Satire That Could Land British Artist In A Turkish Jail

SATIRE THAT COULD LAND BRITISH ARTIST IN A TURKISH JAIL
Dalya Alberge, Arts Correspondent and Suna Erdem in Istanbul

The Times (London)
June 17, 2006, Saturday

A BRITISH artist is facing up to three years’ jail in Turkey for
exhibiting a collage that depicts its Prime Minister as a dog being
awarded a rosette by President Bush in a pet show.

Police in Istanbul seized Michael Dickinson’s Best in Show -in which
he superimposed the head of Recep Tayyip Erdogan on to a dog’s body
-from his exhibition in the city.

He has been told that he is likely to be charged with "insulting the
dignity of the Prime Minister". The show’s organiser, Erkan Kara,
will go on trial on September 12 on the same charge.

Mr Dickinson, 56, said: "It’s such an Alice in Wonderland feeling.
The law is so absurd…This law exists in Turkey about insulting
‘Turkishness’ or the State. You’re not allowed to state your opinion."

The case could greatly embarrass Turkey and Britain, for it raises
questions about Turkey’s human rights record as it seeks EU membership,
with Tony Blair’s backing.

After an international outcry, charges of "insulting Turkishness"
were dropped against the Turkish writer Orhan Pamuk, who had upset
the authorities with remarks on the killings of Armenians in 1915-17.

Pamuk’s case was dropped in January after the justice ministry refused
to issue a ruling on whether the charges were valid.

Mr Dickinson, born in Durham, has lived in Turkey for 20 years,
teaching English at Yeditepe University. His younger brother, John, is
the father of 13-year old Caroline Dickinson, who was murdered while
on a school trip to France in 1996. He spent most of his childhood
in Kuwait, where his father worked for the Kuwait Oil Company. He
was educated at the Anglo-American School with his two brothers,
and later at boarding school in Yorkshire.

His exhibition was staged in Istanbul by the Global Peace and Justice
Coalition.

The collage, hung with anti-war images, refers to the Prime Minister
having taken legal action over cartoons depicting him as various
animals. Upset at Mr Kara’s plight, Mr Dickinson said: "I don’t want
anyone to go to prison for me."

Charles Thomson, of the Stuckist art movement, to which Mr Dickinson
belongs, has told Mr Blair that it is intolerable for an EU applicant
to censor political comment.

"I trust you will communicate your strongest condemnation and ask
for this case to be abandoned," he wrote, urging Mr Blair to oppose
Turkey’s EU membership until it changes its stance on human rights.

Mr Thomson has also written to Olli Rehn, the EU Enlargement
Commissioner, saying that in the Union the collage would be considered
acceptable free expression.

The Turkish Foreign Ministry said: "Everybody will have to wait and
see whether the court decides if this is about freedom of expression
or not." A spokesman said that Turkey’s laws should be respected
and suggested that the international community was too hasty in
condemning it.

"We have laws here and just as it was the artist’s prerogative to
depict the Prime Minister as a dog, it is the prerogative of the
Prime Minister -and this could have been anyone -to decide that this
was insulting and sue him. We will see what the judges say about this."

LA: Gharakhanian Pleads Guilty

GHARAKHANIAN PLEADS GUILTY
By Jennifer English

City News Service
June 14, 2006 Wednesday 7:44 PM PST

A Van Nuys man whose investment scam took in about $20 million,
primarily from Armenian-Americans, was sentenced today to three years
in federal prison.

Melkon Gharakhanian, a 43-year-old Canadian citizen who also used the
name Mike Garian, pleaded guilty in January to one count of mail fraud.

Gharakhanian asked U.S. District Judge George Schiavelli to sentence
him to just under one year behind bars — 364 days — to avoid
triggering rules under which he could be deported after serving
his time.

Schiavelli refused, telling Gharakhanian his scam was "absolutely
inexcusable."

"… this was done by concerted fraud, systematic fraud," the
judge told Gharakhanian. "The impact this has had on the victims
is profound."

In pleading guilty, Gharakhanian admitted that between 1999 and 2001,
a Glendale investment firm he and others ran, National Investment
Enterprises Inc., took money from people who believed they were
investing in specific stocks — including initial public offerings
for Internet businesses and other high-tech companies.

Contracts and other documentation seemed to show that the purported
investments were real, Gharakhanian’s plea agreement states. But
investor funds were actually used to buy non-liquid stocks never
listed on account statements, according to the court document.

Investor money was also being used to pay returns to other investors,
a hallmark of what is known as a Ponzi scheme.

Although some of the investors were paid more money than they invested,
Gharakhanian and prosecutors have agreed the amount victims lost in
the scam was between $2.5 million and $10 million.

Assistant U.S. Attorney Michael Wilner said today that the government
believes about $13 million was returned to investors either in the
form of profits, or as refunds after they complained — leaving about
$7 million investors appear to have lost.

The prosecutor said an obstacle in determining the exact losses of
individual investors — some of whom invested hundreds of thousands
of dollars — is that the records of National Investment Enterprises
were destroyed.

That made it difficult to know how much individual investors were
repaid, and exactly how much they invested, Wilner said. And although
authorities believe they know the rough amount the scam took in,
they are unsure if they have located all the investors, he said.

The factors combined meant the government was unable to determine
what amounts Gharakhanian should be ordered to repay to individual
investors, Wilner told the court.

Even if such determinations could have been made, much of the money
investors lost was spent on Gharakhanian’s losing stock investments,
Wilner said.

One of the investors, 57-year-old veteran David Howard, told the
judge he has so far been unable to collect on a civil judgement of
about $120,000 from a lawsuit he filed against Gharakhanian. He said
he invested $100,000 with Gharakhanian, an amount that represented
his savings.

After losing the money, Howard said, he had to borrow money to pay
his son’s college tuition. He said his financial problems caused a
flare-up of his post-traumatic stress disorder.

"He was instrumental in destroying my family, and he robbed me of
my financial freedom," Howard said of Gharakhanian. "He hasn’t given
any of it back yet."

The U.S. Securities and Exchange Commission previously won a $2.6
million judgment against Gharakhanian on behalf of investors, but is
still attempting to locate assets, Wilner said.

For his part, Gharakhanian apologized to the court, and said he lost
his own money, as well.

"I thought I could make money for everybody, but I failed, and I wish
I could pay them back," he told the judge.

Schiavelli ordered Gharakhanian taken into custody immediately to
begin serving his 37-month sentence.