TREND Information, Azerbaijan
Sept 1 2006

Azeri FM Comments on `Road Plan’ of Nagorno-Karabakh Conflict

Source: Trend
Author: A.Ismayilova

01.09.2006

Azerbaijani Foreign Minister Elmar Mammadyarov said that as there
many issues have been agreed on, now is the right time to solve the
Nagorno-Karabakh conflict, Trend reports. He was commenting on the
alleged `road plan’, mentioned by the U.S. Ambassador Matthew Bryza,
the OSCE Minks Group Co-chair.
`However we should still continue talks on the more difficult
issues,’ the Minister stressed.
Mammadyarov said that the plan involves defining the methods on the
possible signing of an agreement. `I do not regard it as a new
principle of the negotiation process.’
With regards to the opportunities for dispatching the Azerbaijani
peacemakers to Lebanon, the Minister said that the issue should be
studied separately. `It is necessary to define the situation in
Lebanon, as the question concerning the mandate of peacemakers has
not been solved yet. I cannot say that Azerbaijan will dispatch its
peacemakers there, but we are dealing with the issue,’ Mammadyarov
stated.
From: Emil Lazarian | Ararat NewsPress

TREND Information, Azerbaijan
Sept 1 2006

Azerbaijan Shall Increase Warfare Budget as Much as Needed to Free
Grounds From Armenian Occupants – MP Aydin Mirzazadeh

Source: Trend
Author: J.Shahverdiyev

31.08.2006

Azerbaijan should increase its warfare budget as much as needed to
release our grounds from Armenian occupants, said MP Aydin
Mirzazadeh, member of Political Council with New Azerbaijan Party,
Deputy Chairman of permanent commission for defense affairs, reacting
to words said by Benito Ferrero-Valdiera.
Speaking at «Caspian Outlook-2008» forum in town of Bled (Slovenia),
the EU Commissioner for Foreign Affairs Benito Ferrero-Valdiera
called Georgia and Azerbaijan to retrain from increasing the warfare
budget.
Mirzazadeh said this demand was not possible to accept as `20% of
Azeri grounds have been occupied by Armenians and Georgia is
currently unable to control is two autonomous entities. History shows
that a country under occupation shall increase its military budget.
Nevertheless, Azerbaijan’s military budget totals 8 percent against
30 percent in Armenia», he said.
Mirzazadeh also said the EU Commissioner’s opinion on Azerbaijan is
not clear. «The Commissioner says nothing of Armenia’s collaboration
with the EU but much of some claims to Azerbaijan», he underlined.

SONG CONTEST
Aram Abrahamian
Aravot.am
31 Aug 06
The ministry of culture was right publishing the texts of five drafts
of anthem, which have passed the contest. Unfortunately, the public
doesn’t have an opportunity to judge the music of those drafts: 5
drafts of anthem must be often sounded on radio and TV, which isn’t
done yet. I’m sure the anthem is 60% music and 40% words, because it
is often produced without the text. Besides, music is more powerful
emotionally, than the word is.
Speaking about the published texts I want to stress the following
fact: Ararat B/ I guess whose pseudonym it is/, Vahagn Davtian and
Liudvig Durian are skilful poets who are worth to become the authors
of the national anthem of Armenia. But those respectful poets will
admit that they aren’t like Charents.
So if the public discusses the texts, it will be meaningless to
compete with Charent’s “Es im anush Hayasatani”. This masterpiece is
also profitable that there will be no need to read it by heart. The
text written by the official of the ministry for Aram Khachatrian’s
music is non professional and skilful.
The ministry suggests introducing to other texts written for Aram
Khachatrian’s music on _www.mrcuyt.am_ () site. But
they are worse than the produces examples. It is impossible to compose
any high quality verse for the already composed music.
Aram Khachatrian’s music is impressive. The composer has used the
tunes of medieval “sharakan” /church songs/, which doesn’t only show
the composer’s talent but patriotism, too.
The selection of anthem isn’t a song festival. This is a political
action, however Khachatrian’s music is talented it symbolizes the past
epoch, refused ideology. So it shouldn’t display only musical approach
here. As for me “Mer Hayrenik” or anthems composed by T. Mansurian’s,
E. Erznkian’s, E. Hovhannisian or R. Amirkhanian are equally
adoptable. Let Khachatrian’s music remain as the history.

NA MUST BE RESPONDENT IN THE CC
Anna Israelian
Aravot.am
31 Aug 06
Chairman of the Constitutional Court Gagik Haroutiunian considers
this version more reasonable.
It is known that the first personal application the CC decided
to examine was Artak Zeinalian’s. Why was the examination of that
application appointed in November?
We haven’t started any examination in August as the NA was on holiday
and our courts as well. The law provides 9 months for the examination
of that case.
NA chairman Tigran Torosian informed during the latest press
conference that the CC had recognized the NA respondent for 7 cases
about constitutionality of laws and predicted that number of such
packages could be added. Na chairman didn’t know whether the NA would
be respondent for all that kind of cases or the government also must
be respondent in the CC. What is your opinion?
First of all they shouldn’t worry about the quantity of
applications. We should examine how it is displayed in
other countries. For example in Germany, 2-3% of personal
applications include issues of constitutionality and become point of
examination. Such applications are 3-5% in Czechia and Slovakia, 5-8%
in Russia. 10-11 from 112 applications is about constitutionality
in Armenia, that is 9-10%. First of all we must examine why that
percent is so high. I connect it with the accumulated problems,
first of all: CC didn’t have that power before, the citizen wasn’t
able to turn and a lot of issues have been accumulated. Only 10%
of our personal applications contents problems of constitutionality,
and NA different commissions have connection with those issues.
And if each commission once in three months is able to be respondent at
the CC, nothing strange will happen. Irrespective of the fact how the
law will be changed, will it remain the same or won’t, Constitutional
Court make the final decree in every country for recognizing the
respondent side. The law can’t determine, this is the respondent
side. As every case has its specificity and the court must decide
who must answer.
You think the NA must be respondent in the CC but the NA chairman
thinks that problem may be impossible to solve in the framework of
NA committees.
Na thinks there aren’t enough powers to provide for applications. The
parliament itself decides who will represent in the CC, and they
can send only three persons. That can be either the chief of the
commission, deputy chief or its member, or a certain advocate. The
problem is to choose the right way. The president of the country and
the parliament in Russia and many other countries have their permanent
representatives in the CC during the examination of all cases as the
examination of each case deal with the public authority. When the
NA tries to find any solution, it must think how to improve further
legislative activities.

PAROLE DENIED IN 1982 MURDER OF TURKISH DIPLOMAT IN LOS ANGELES
KESQ, CA
CBS 2, CA
Aug. 31, 2006
LOS ANGELES Parole has been denied for a man convicted in the 1982
murder of a Turkish diplomat in Southern California.
Harry Sassounian’s attorney, Mark Geragos, says he’s optimistic and
doesn’t view today’s decision as a setback, saying it’s rare for
parole to be granted on the first try.
Turkish Consul General Kemal Arikan was killed January 28th, 1982.
Sassounian was 19 at the time. A second gunman was never caught.
A jail informant testified Sassounian told him he killed the diplomat
as revenge for the deaths of about one-point-five (m) million Armenians
at the hands of Turks late in the 19th and early in the 20th century.
A Los Angeles County district attorney’s office spokeswoman says
Sassounian will not be eligible again until 2010.

REPORT FAULTS GOVT DEPARTMENTS
By Standard Reporters
Standard, Kenya
Aug. 31, 2006
The Kiruki Commission report exposes incompetence in some key
Government departments.
The Commission criticises the Immigration for the way it handled the
Artur brothers’ applications to do business in the country.
Sources say the committee made several recommendations, including
overhauling the department, which is accused of giving leeway to
criminals to enter the country and do business.
It also notes several irregularities in the deportation of Artur
Margaryan Artur Sargasyan, and their two Tanzanian accomplices.
Prohibited immigrants
The report notes that the Arturs could still return to Kenya because
their passports were never stamped to indicate they had been deported.
When applying for entry permits, the Arturs did not give all the
required details in their application forms- such as their photographs
and addresses.
Sources say the Commission recommended that before deportations,
deportees’ photographs and fingerprints should be taken.
Deportees’ passports should be stamped “prohibited immigrants” and
their particulars circulated to Interpol, says the report.
The report also recommends that Kenyan visas should be upgraded to
tamper-proof ones. It notes that visas in use are “wet stamp”, which
could be easily produced by criminals.
Forged documents
During its public sittings in Nairobi, the Commission was told that
some foreigners were issued with Kenyan visas on arrival at airports.
The report recommends that such visas should be issued by
professionally trained officers in Kenyan missions abroad.
Also put under the spotlight is the Registrar of Companies department,
with recommendations that the office overhauls its systems.
During sittings, the Commission heard that forged documents were used
to register the two companies associated with the Arturs.
The office is asked to enforce a requirement to de-register any company
found to have been fraudulently registered. To protect the public
from dealing with shadowy firms, regulations on forming companies
should be published, the report is further quoted.
Surveillance cameras
It recommends that the companies’ registry be computerised “as a
matter of urgency”. Staff should also be punished for misconduct.
It further recommends that the area for conducting searches for
company names be fitted with surveillance cameras.
It also recommends that the Kenya Airports Authority (KAA) scraps the
office of deputy managing director and re-organises its top management.
Sources say the commission’s report falls short of terming the post
illegal, adding that it is not recognised by the KAA Act.
Ms Naomi Cidi held the position before President Kibaki suspended
her on June 12. The report also terms the position a burden to KAA.
Procedure for issuing passes
During its public hearings in July, the commission was told that a
deputy director held the responsibility of issuing access passes to
deserving persons.
It was told that the Arturs and their associates were irregularly
issued passes to all airports. The pink passes allowed them access
to aircraft, posing a serious threat to security, especially in the
wake of the terrorism threat.
However, Cidi denied the claims at the time insisting that it was
her boss, Mr George Muhoho, who issued the Arturs with passes.
In its report, the commission recommends that the procedure for
issuing passes should be overhauled.
But the report also urges the Ministry of Foreign Affairs to clarify
to its protocol officers who should be accorded VIP treatment.
Managing security
The commission also recommends that the police force be subjected to
a management audit.
It criticises Police Commissioner, Maj-Gen Hussein Ali, for ignoring
the chain of command. The audit, those privy to the report say,
should find out whether the leadership structure is up to the task
of managing security.
The commission is said to have demanded that redundant structures be
done away with and the competence of police officers be scrutinised.
The commission accuses Ali of ignoring his immediate juniors and
dealing with those at lower ranks, such as the Deputy Provincial
Criminal Investigation Officer, Mr Isaiah Osugo.
Ali’s decision was allegedly interpreted by the mass media as evidence
of hostile relations between him and Mr Joseph Kamau, the CID director.
Interpol section
Another concern raised by the report was that information received on
activities of the Armenian brothers from Interpol in Yerevan, Armenia,
was never shared among different formations of the police force.
The report recommends that the Kenya Police Interpol section be
overhauled.
The commission was, according to those privy to the report, perturbed
by the lack of commitment among police officers deployed at the
airport on June 8.
The commissioners are said to have reported that police officers on
duty on that day, apart from one CID corporal, failed to assist a
customs officer who was assaulted by Mr Artur Margaryan.
The commission is said to have observed that the officers showed a
lot of lethargy, ineptitude and recklessness.
Those privy to the report also said that the commission found it
strange that the Artur brothers were not disarmed when they brandished
weapons at members of the public.
The commission is said to have recommended that changes be made in
the police force.

ANKARA CONDUCTS UNOFFICIAL DIPLOMACY WITH YEREVAN
By Suleyman Kurt, Ankara
Zaman Online, Turkey
Aug. 31, 2006
Talks between Ankara and Yerevan, which began last April when Turkish
Prime Minister Recep Tayyip Erdogan sent a ‘historic letter’ to
Armenian President Robert Kocharian, continue.
The Armenian side sent an unofficial document to Ankara last
month reiterating its proposals. While Ankara is examining the
document, diplomatic sources speaking to Zaman said that the Yerevan
administration restated its position in its unofficial response.
The Armenian administration does not agree with Turkey regarding
the establishment of an independent committee of historians to
investigate the so-called genocide allegations. “We should first
establish diplomatic relations,” they said.
Armenian and Turkish diplomats met in Vienna three times last year
following the correspondence between Prime Minister Erdogan and
Armenian President Robert Kocharian.
According to Ankara, no progress has yet been made in the talks. In
order for the start of diplomatic relations, “a document should be
signed by both parties concluding that some problems between the two
countries, including the border dispute, have been resolved”.
However, the parties failed to reach such an agreement in any of
the meetings in Vienna. In the letter that Erdogan sent to Kocharian
before April 24 last year, he said “A group of historians and experts
should investigate the incidents that happened in 1915.” Kocharian
replied by saying, “We should first establish diplomatic relations.
Then, an inter-governmental commission can discuss the events.”
Ankara did not send a response to this letter at that time.
From: Emil Lazarian | Ararat NewsPress

U.N. FORCE IN LEBANON GETTING WEAPONRY
By Todd Pitman
Mahmoud Tawil – AP
The Associated Press
Washington Post, DC
Aug. 31, 2006
BEIRUT, Lebanon — The U.N. force in Lebanon will soon receive the
first real boost in weapons and manpower: one battalion each of Italian
and French troops with heavy armor, including tanks and artillery,
officials said Thursday.
Nearly 1,000 Italian soldiers are due in the war-battered southern
port of Tyre on Saturday, the largest addition yet to the U.N.
Interim Force in Lebanon, or UNIFIL, spokesman Alexander Ivanko told
The Associated Press.
So far, only 250 extra French troops have arrived since a Security
Council resolution promising an expanded U.N. force halted a month
of fierce clashes between Israel and Hezbollah on Aug. 14.
Under the resolution, the 2,000-strong UNIFIL is to be increased
to 15,000. Along with an equal number of Lebanese soldiers, the
blue-helmeted troops are to deploy across south Lebanon as Israeli
forces withdraw, leaving behind a buffer zone between Israel and
Hezbollah.
France, which will initially lead the force, is sending its first full
battalion of 882 troops and a shipment of tanks and heavy armor next
week, French Defense Minister Michele Alliot-Marie told reporters. The
troops will arrive in southern Lebanon by ship on Sept. 10 and will
be operational Sept. 15.
France’s contribution is expected to include Leclerc tanks,
surface-to-surface artillery, short-range anti-aircraft missiles and
radar _ unusually heavy weapons for a peacekeeping force.
The heavy weaponry “has a dissuasive character and guarantees the
freedom of movement and the security of the troops,” Alliot-Marie
told lawmakers in a closed-door session Wednesday. Excerpts from that
meeting were released by the Defense Ministry Thursday.
U.N. member states are given wide freedom to supply their missions the
equipment as see fit. Still, peacekeeping deployments don’t normally
deploy such heavy equipment _ though the U.N. has required nations to
in some hot spots, as in Congo, where it has attack helicopters in use.
“It’s important that we arrive in sufficient strength to deter any
potential spoilers and provide confidence in the process to strengthen
the cessation of hostilities agreement and bring political breathing
space for the parties on the ground,” said Nick Birnback, an adviser
in the U.N. Peacekeeping Department.
Alliot-Marie insisted France had obtained all “necessary guarantees”
for its troops before committing to UNIFIL, given concern over previous
peacekeeping debacles in Bosnia and Congo.
She also warned the 19-day-old cease-fire in Lebanon was being
“imperfectly respected,” and that the situation on the ground was
still fragile. Though the truce has held overall, minor clashes and
an Israeli raid into Lebanon have been reported.
On Friday, French Prime Minister Dominique de Villepin will hold talks
in Rome with Italian Premier Romano Prodi about the peacekeeping force,
Villepin’s office said.
The meeting will address the situation in the Middle East “at the
moment when our two countries have decided to become involved in a
strong way in keeping the peace in Lebanon,” Villepin’s office said
in a statement.
Both countries were deeply involved in crafting and securing the U.N.
cease-fire resolution. France will initially lead UNIFIL and Rome
has signed up to take command of the mission in 2007.
Europe has pledged 6,900 soldiers for UNIFIL. Italy’s contribution
of 2,500 troops is the largest, second to France’s 2,000.
An advance team of 29 Spanish soldiers arrived Wednesday in Beirut on a
reconnaissance mission to prepare a larger contingent that could number
up to 1,000 if Spain’s Parliament approves the deployment, Ivanko said.
The Italian Defense Ministry put the number of its troops arriving
in Tyre on Saturday at 800 and said 200 more would arrive in Beirut
the next day.
The five-ship Italian fleet set off for Lebanon on Tuesday carrying
Italian marines and engineering corps specialists. Italian commanders
have said the troops are likely to be deployed in and around Tyre.
Alliot-Marie said a second French battalion would head to Lebanon a
few weeks after the first.
U.N. Secretary-General Kofi Annan has said UNIFIL would not disarm
Hezbollah fighters as called for by Israel, and would only deploy
along the Syrian frontier if the Lebanese government asks them to.
Syria opposes any international forces along its border.
In her speech to lawmakers, Alliot-Marie said the French commitment
to UNIFIL would cost $128 million for the first year, and that U.N.
funds could reimburse between $12.8 million and $25.6 million.
A separate, emergency contingent of about 200 French soldiers arrived
at Beirut airport Sunday to help the Lebanese army rebuild bridges
destroyed or damaged during 34 days of fighting between Israeli forces
and Hezbollah guerrillas. That team was sent to allow the existing
UNIFIL force greater mobility, Alliot-Marie said.
The French government sent two ships carrying 15 temporary bridges,
oil cleanup equipment and humanitarian aid to Lebanon this week as
part of the rebuilding effort, the Foreign Ministry said Thursday.
UNIFIL has been in Lebanon since 1978 to monitor the withdrawal of
Israeli troops who invaded Lebanon the same year.
Photo: A Lebanese Armenian protester carries a placard during a
demonstration against the participation of the Turkish troops in the
peacekeeping force in Lebanon, in front of the United Nations House in
downtown Beirut, Lebanon, Thursday, Aug. 31, 2006. US, EU and Israel
pressed for peacekeepers from Turkey, the only Muslim member of NATO,
and a country with close ties to Israel and Arab countries.
The large Armenian population in Lebanon has loudly protested Turkish
involvement. Armenians say up to 1.5 million Armenians died or were
killed over several years during World War I as part of a genocidal
campaign to force them out of eastern Turkey. (AP Photo/Mahmoud Tawil)
nt/article/2006/08/31/AR2006083101106.html

SAAKASHVILI WANTS BUSINESS TO HELP IN EASING RUSSIA’S EMBARGO
Civil Georgia, Georgia
Aug. 31, 2006
President Saakashvili told leading Georgian businessmen on August
31 that he has to exert what he called it “a light racketeering”
and to ask each of them to buy at least 10 tones of grapes from
wine-growers in order to ease a burden of Russia’s decision to ban
import of Georgian wine.
President Saakashvili met with businessmen in a town of Sagarego in
eastern region of Kakheti, which is a home of over 60% of Georgia’s
vineyards. Outdoor meeting, which was televised live, took place in
a vineyard.
Mikheil Saakashvili told businessmen that Russia wants to replace
the current government in Georgia through triggering social unrests
and banning of import of the Georgian wine was a part of this policy.
As the harvest approaches, wine-growers, mainly in the Kakheti region,
may face serious problems selling their grapes, because Georgian
wine-producing companies will not be able to purchase as many grapes
as last year after the Russian market was closed down in March.
The authorities are now trying to somehow ease potential protest
by thousands of wine-growers, especially on the eve of the upcoming
October 5 local self-governance elections.
“I want to ask you [businessmen] one thing. We should all help Kakheti
this year. We have put an end to the state racketeering in Georgia. But
today I want to exert a light racketeering on you for the first and
the last time. So I offer each of your company to buy this year 10
tones of grapes; take it and you can either let you employees eat it
or produce a wine from it,” Saakashvili said.
“You should understand that now we are in a condition of economic
war. This is not an ordinary situation… I instruct PM Nogaideli to be
in charge of [grape] harvest in Kakheti. In addition, I also instruct
PM Nogaideli, Mikheil Svimonishvili [the Agriculture Minister],
Vano Merabishvili [the Interior Minister], Irakli Okruashvili [the
Defense Minister] and Zurab Adeishvili [the Prosecutor General] to be
in charge of harvest in each of five districts of Kakheti – Signagi,
Sagarego, Telavi, Kvareli and Gurgaani,” he added.
He also said that the state itself can not purchase grape, but the
state can create conditions for wine-growers to sell grapes, despite
Russia’s “embargo.”
“We should overcome this harvest with minimal losses and we should
not make our enemies happy… We should not let our enemies let see
our wine-growers protesting,” Saakashvili said.
Speaking Tough on Russia
During the meeting with businessmen he spoke tough on Russia and blamed
“political establishment” in Moscow for deliberately creating problems
to the Georgian state.
President Saakashvili told businessmen that although the Georgian
state is no longer “a terrorizer” of the business, as it was during
ex-President Shevardnadze’s administration, “now a new terrorizer”
of the Georgian business has emerged.
“Unfortunately it is our neighboring Russia’s political establishment,”
he said.
“Russia has a very firmly expressed policy in respect of Georgia –
I want to believe that this is the policy of only one part of the
Russian authorities – and this policy is very simple: not to let
Georgia to strengthen and not to let Georgia to restore its territorial
integrity,” Saakashvili said.
“Russia has vividly defined policy aimed at replacing the current
government in Georgia very promptly. They are implementing this through
trying to stifle Georgia so that to make the Georgian people believe
that there is no reason to fight for freedom, to fight for restoring
rule of law in Abkhazia and in Tskhinvali [breakaway South Ossetia]
and to make [the Georgian people] to overthrow this government and
to kneel down in front of Russia, because success of Georgia means
a failure of ideology of those decision-makers [in Moscow]. And do
not think that they [Russian officials] are promising something in
exchange, I know this because I had talks with them, they are just
telling us: you are in a trouble now, the only thing we can do is
not to further worsen your situation… This was [a content] of my
recent talks with our partners in Russia,” Saakashvili said.
He said that a closure of the Zemo Larsi border checkpoint by Russia
also aimed has also aimed at targeting Armenia.
“Because Russia is telling Armenia: let’s jointly plot [against
Georgia]. But of course they will not be able to receive anyone’s
consent on this,” the Georgian leader said.
Saakashvili said that Russia has its allies in Georgia, which try to
ease Moscow’s plans in respect of Tbilisi.
“Those [political] parties, which say that the Georgian government
has closed down Russian markets for the Georgian peasants are allies
of Russia… Also those media sources which are disseminating this
information are [Russia’s allies]. Those media sources, which will
start propaganda of an idea that there is a problem with the [grape]
harvest because the government made mistakes, will be [Russia’s
allies],” Saakashvili said.
He said that the only solution in the existing situation is to find
alternative markets for the Georgian wine.
“When the Russian market will open for the Georgian wine? There is a
very simple answer: as soon as they [officials in Russia] see that
Georgia has not been devastated… This market will only be opened
when Russia sees that Georgia already has an alternative markets for
its wine,” Saakashvili said.
“Yes, they [Russian officials] do love Georgian wine, but willingness
to harm us is stronger; yes they miss the Georgian wine, but they say
let’s be patient and at first throw [the current Georgian government]
away,” he said.
The President said that Georgia should not even hold talks with Moscow
about opening Russian market for the Georgian wine.
“It will only make them think that they are on a right way,”
Saakashvili said.
“There is no reason to have talks with predator… The only thing we
can do is to say without any rhetoric and irritation: we will do our
job anyway,” he added.
“I want to tell Kakhetian peasants that there will problems this year
my brothers… But the most important now is not to let them [Russian
officials] hear our nagging; the most important is our journalists
to cover [harvest] so that not to make them [Russian officials]
see that they have reached their goal.”
In the end of his speech, President Saakashvili asked Mayor of
Tbilisi Gigi Ugulava, who is currently campaigning for the upcoming
local elections in order to retain the post, to unveil his new
initiative. Ugulava told businessmen that the Tbilisi Municipality
will buy twice more grape than they will do. He said the move will be
a demonstration of a desire to help the country in a time of trouble.

CENTRAL BANK HOLDS FIRM ON FISCAL POLICY
Haroutiun Khachatrian
EurasiaNet, NY
Aug. 31, 2006
Armenia’s Central Bank is holding firm on its fiscal policy in the
face of criticism about the strength of the country’s currency, which
has gained about 40 percent in value against the US dollar in recent
years. In defending itself against its critics, Central Bank officials
are pointing to recently released data concerning the impact of cash
remittances on the country’s economy.
It had long been believed that money sent home by Armenians abroad
plays an important role in the Armenian economy, but the survey,
prepared by the Armenian Central Bank with support from the World Bank,
contained some surprising results. The total amount of remittances
in 2005 was pegged at $940 million, a figure that exceeded earlier
estimates, and which was higher than the state budget of $912 million.
The other surprise is that the bulk of remittances goes to middle-class
families in Armenia, contradicting the widely held perception that
money from abroad went mainly to the poor and played a vital role in
keeping poverty in check. Overall, only 37 percent of Armenian families
benefited from remittances, according to the data, which was compiled
between February and April of this year. Central Bank officials have
relied on these findings to fend off calls for devaluation, insisting
that the poor have not been severely impacted by the strong dram. They
add that taking action to reverse the dram’s rise could spur inflation,
which would hurt all Armenians.
The dram’s value has been a hot topic in August. It was trading at
around 396 to the US dollar on August 31. In late 2003, the dram
traded at about 570 to the dollar. Opposition politicians have long
suspected authorities of keeping the dram artificially strong in order
to divert dollars into pet projects that primarily benefit members of
the governing elite. [For background see the Eurasia Insight archive].
“A group of people gains millions of dollars when ordinary citizens
incur serious financial losses,” the Noyan Tapan quoted opposition
politician Artur Baghdasarian as saying August 12. Baghdasarian,
who formerly served as parliament speaker, split with President
Robert Kocharian’s administration earlier this year and is now seen
as a potential challenger to the incumbent in the next presidential
election. [For background see the Eurasia Insight archive].
Meanwhile, some economists, including Eduard Agajanov, say the strong
dram is damaging Armenia’s export capabilities. According to the
Regnum news agency, Armenia’s deficit during the first six months of
2006 approached a half-billion US dollars.
The average per capita income in households receiving remittances
is $78 per month, well above the poverty line, which officially is
at $42.3 a month. However, an August 11 commentary in the Iravunk
newspaper suggested that the Central Bank’s characterization of such
households as middle-class might be misleading, given that without the
remittances a large share of the beneficiaries might tumble into the
“poor” category.
Almost three-quarters of the remittances were sent from Russia. The
United States was also an important source of funds, accounting for
14.3 percent of remittances. Germany, Greece and Ukraine rounded
out the top five source countries, collectively accounting for 5.2
percent of remittances.
Out of the total of all cash remittances, roughly 76 percent was spent
on daily necessities, including food and clothing, according to the
Central Bank’s data. Another 6.1 percent was earmarked for education
expenses. The remainder was allocated in a variety of ways, including
1.2 percent spent on real estate investments, 2.0 on investments in
small businesses, and 1.1 percent held in savings.
The Central Bank intends to carry out additional research on remittance
patterns, according to Karin Karapetian, a representative of the
Central Bank Statistical Department. The new survey will be conducted
from September-November and will focus on remittances designed to
pay for luxury goods, or to fund investments in real estate and/or
businesses.
The August 9 data indicates that remittances will continue to be
a significant factor in the Armenian economy for the foreseeable
future. Almost 85 percent of respondents expressed the belief that
they will continue to receive remittances in the coming year. Less
that 10 percent said they expected to receive no money down the road.
The situation was the same on the sending end well, with 91 percent
of Moscow respondents saying that they intended to keep sending money
home. The Central Bank projected the overall total of remittances
for this year would be about 17 percent higher than the 2005 figure.
Editor’s Note: Haroutiun Khachatrian is a Yerevan-based writer
specializing in economic and political affairs.