FIRST OPEN AIR PAN-ARMENIAN PHOTO-FESTIVAL KICKS OFF
Armenpress
Aug 09 2006
YEREVAN, AUGUST 9, ARMENPRESS: First Pan-Armenian photo-festival
entitled “Under the Open Sky” kicked off today in the Moskovian garden
in Yerevan, with the participation of 40 professional photographers
and beginners from Armenia and Diaspora.
The open air photo-festival has been organized by the National
Association of Armenian Photographers in cooperation with “Vega”
company. The festival will last for three days. It presents 200 works
related to different themes, including the crash of the Armenian
airplane A-320, on May 3.
The head of the National Association of Armenian Photographers Sergey
Hakobian said that the festival has been organized during one month
and a half and is aimed at the development of photography in Armenia.
“Armenian photographers have great potential and our association will
do everything possible to make the festival Pan-Armenian and annual,”
he said, adding that in future they will try to establish relations
with a number of international organizations dealing with photography
and participate in international festivals presenting Armenia with
the eyes of Armenian photographers.
The head of the association also noted that photographers from Turkey
and Iran also presented their works, though because of short time
many of the representatives of Diaspora could not participate in
the initiative.

ARMENIAN HOUSEHOLDS RECEVIE MONEY TRANSFERS FOR $940 MLN IN 2005
ArmRadio.am
10.08.2006 11:14
Armenian households received money transfers for about $940mln,
Karine Karapetyan, head of the department for external statistics, the
statistical administration of the Central Bank of Armenia (CBA), told
journalists according to the results of a survey, organized by the CBA.
She said that $750mln of the transfers from the abovementioned amount
entered Armenia by means of the banking system. “It amounts to 78%
of the total amount of all money transfers,” she said.
In general, Karapetyan reportd that over the last three years
(203-2005) the annual increment of transfers to Armenia amounts to 37%
on average. “Their share in GDP amounts to about 15%,” she added.
In the survey organized under the support of the World Bank in
February-April 2006, 2000 Armenian households, and receiving transfers
from abroad, 2000 respondents in Moscow, making transfers, and also
a few Armenian organizations that operate reception and allocation
of transfers were involved.
The methodology of the survey was worked out by the CBA, and its
conduction was implemented by Alphaplus Consulting Company, ARKA
Armenian News Agency reported.

AMERICAN DOLLAR RATE FALLS LOWER 400
ArmRadio.am
10.08.2006 11:20
The USD exchange rate on Armenia’s foreign-exchange market has
fallen lower than AMD 400/$1 thereby passing one more psychological
minimum. Some Armenian banks and exchange offices have set the
following exchange rates: AMD 393-397/$1 (purchase) and AMD 397-405/$1
(sale).
This caused stock-jobbing on the country’s foreign-exchange
market. Most exchange offices are closed for lack of sufficient cash
as well as because of uncertainty. Long queues have formed in front
of working exchange offices.
The CBA-set USD average exchange rate is AMD 399/$1 CBA experts
believe that the US dollar will continue its fall even down to AMD
350/$1 before the end of next week if the CBA does not interfere and
start buying up dollars.
Other experts and dealers believe that the USD would be falling at
a higher rate but for the auctions on the Armenian Stock Exchange,
which at least allows the developments on the foreign-exchange market
to be followed and possible exchange rate on the following day to be
forecast. All funds deposited with the stock exchange by banks have
run out.
According to experts, the main factor of the USD behavior is huge
USD flows into the country. The matter concerns not only transfers
for individuals, but also funds of enterprises.
Also, to maintain the foreign-exchange position, banks are selling US
dollars on a large scale.Experts consider the fall in the EUR exchange
rate normal, connecting it with the AMD revaluation against the USD
and with international trends in the EUR/USD ratio.
9.79% USD depreciation against the AMD has been recorded in Armenia
since the beginning of 2006, with 2.41% EUR depreciation.
It is noteworthy that the current exchange rate is almost equal to
that 11 years ago: in 2005 the USD/AMD exchange rate was $1/AMD 406 at
the beginning of the year down to $1/AMD 402 at the end of the year,
while in 1995 it was $1/AMD 405.88.
During 13-tear history of the Armenian national currency, the highest
MD exchange rate was recorded in March 2003 – AMD 591.76/$1 at the
CBA-set nominal exchange rate. Since them, the Armenian dram has
actually revaluated by 45.76%, whereas the USD has devaluated against
the AMD by 31.39% or by AMD 185.83, ARKA Armenian News Agency reported.

FROM PRESIDENTIAL TO MINISTERIAL GOVERNMENT?
Hakob Badalyan
Lragir.am
10 Aug 06
All the signs of anarchy are apparent in Armenia: lack of law,
indifference towards citizens, obsession with killings. And perhaps
the most vivid example of the lack of power is apparent: President
Robert Kocharyan almost does not react to the highly important events
in the country, which are already involving almost all the spheres,
including political, non-governmental, economy, finance. In broad
daylight criminals shoot at each other in the streets and scandalous
assassinations take place, the president keeps silent, the exchange
rate of the dollar drops lower and lower, emptying the pockets of the
population, the president remains silent, the political system is led
to a one-party system, Robert Kocharyan is again silent (the speaker
is Robert Kocharyan’s, but is not Robert Kocharyan), the cause of
the mysterious crash of the Armenian plane, which is as mysterious,
is published, Robert Kocharyan is again silent, the Russians once
again block the only motorway of Armenia, the president of Armenia
is silent. In this situation the society has every reason to suppose
that Armenia does not have a president, that there is no presidential
government in Armenia any more.
If the president does not speak, it does not mean, of course, that he
does not have power. However, similarly we may suppose that he does not
speak because he does not have power. In this case, it is necessary to
find out who has real power in Armenia. The public and political chaos
and “maneuvers” inside the government prompt that power in Armenia
does not have a factual leader now, and all the processes underway
are intended to get hold of power. But if the country does not have
a leader now, nevertheless, there must be someone who directs these
processes. And eventually the one will become leader who directs the
processes leading to leadership.
Consequently, the question occurs who directs the ongoing processes,
namely the assassinations, the exchange rate, one-party system, the
blockade by the strategic friend, the chronology of the plane crash.
The public probably has the answer to this question, which they did
not learn from a prophetic dream or did not tell by a coffee cup,
it is rather due to a surge of information and propaganda. It is
consistently instilled in the public that power is gradually passing
to the minister of defense. In this case, the silence of the president
directly boosts the effect of propaganda.
Does it mean that Robert Kocharyan’s silence approves the forming of
the governmental image of Serge Sargsyan? It might be too ingenuous
to think that Robert Kocharyan does not realize the situation. And
maybe he realizes and keeps silent. However, if he consciously keeps
silent and approves the actions of Serge Sargsyan, it does not mean
that the president agrees to these actions in reality. The aides
of the defense minister also understand this, and after the early
conference of the Republican Party they do not encourage the actions
of the “boss”, they mourn that he made a mistake by relying on the
criminal, and there is only one thing left to do – capture the post
of president until January.
And it is natural that in this situation the best option for Robert
Kocharyan is to keep silent, let Serge come and take the post of
president until January, if he can. Maybe Robert Kocharyan thinks
so and is waiting. One should note that waiting is not a problem
for him, he knows how to wait. There is a circumstance, however,
that may turn into a trick on Robert Kocharyan. The point is that
the defense minister may not step up an offensive to capture the post
of president. After all, the president of the Chess Federation knows
what a king is if there is nobody around him, no pawns, no figures,
no queen. Consequently, the defense minister attacks these figures.
And it should be noted that he is rather successful. All the junior,
medium and senior officials yield to him one by one. And the reason
is not the skills of Serge Sargsyan but the silence of the president
rather. The officials need protection, consequently they are vulnerable
to all kinds of blackmail. The same Yervand Zakharyan, who has felt
for a number of times the reproach of Robert Kocharyan, feels that
the president may seriously reproach him one day, therefore he is
seeking for protection in the political party of the defense minister,
which used to be the prime minister’s.
The rest act similarly. And in this case Serge Sargsyan will no more
need the post of president. He will control the situation and nothing
will disturb him to prepare for the year 2008. And perhaps this is
the reason why his “spokesmen” trumpet that either until January or
never. Most probably, the real purpose of this is to guarantee the
silence of Robert Kocharyan, which will guarantee the undisturbed work
of the defense minister. He needs rest until January, after January
his power will be enough to make any president silent, independent
from the president’s will.

WHEREAS SERGE SAYS AGHDAM IS NOT OUR HOMELAND
Lragir.am
10 Aug 06
The union of NGOs Yerkir for Repatriation and Settlement (chair Sevak
Artsruni) initiated and funded the expedition for Tigranakert of
the Armenian Institute of Archaeology and Ethnography, led by Doctor
Hamlet Petrosyan. On the very first days of excavations near the city
of Aghdam the expedition made a sensational discovery. They found
the citadel built by the Armenian King Tigran the Great (95 – 55 BC)
built in an advanced Hellenic technique, which is the best evidence
that the town of Tigranakert of Artsakh was located in the place
where excavations are carried out. One of the terraces in the part
of the town surrounded by a wall is dug as well. The excavations in
the urban part of the town and the adjacent burial places have begun.
The excavations prove the presence of the Armenian identity in the
lower part of the Khachenaget River (the former region of Aghdam)
since at least the I century BC.

DPM TO ACQUIRE 80% INTEREST IN DENO GOLD ARMENIAN PROJECT ADDS 300,000 TONNES TO ANNUAL PRODUCTION
Market Wire Incorporated
Aug 10, 2006
Dundee Precious Metals Inc. (TSX: DPM) (“Dundee Precious”, “DPM” or
“the Company”) is pleased to announce that it has signed a Share
Purchase Agreement to acquire 80% of Vatrin Investment Limited
(“Vatrin”), a private entity.
Vatrin holds 100% of Deno Gold Mining Company (“Deno Gold”), with
its principal asset, the Kapan Mining Project, located in Southern
Armenia. The transaction, amounting to US$22 million (representing
US$14 million for Vatrin shares and approximately US$8 million of
debt), plus an additional US$10 million investment commitment for
mine expansion, is expected to close by the end of this month.
The Kapan Mine has annual production of 300,000 tonnes of ore from
its current underground operations, where precious metals contribute
to approximately 50% of its revenues, based on long term prices. DPM
intends to expand the underground operations and introduce open pit
mining to maximize the present mine milling capacity of over 1 million
tonnes/year. The concentrate produced at Kapan is readily saleable
due to the lack of impurities or deleterious elements.
“We are excited to add this Project to our production pipeline,”
said Jonathan Goodman, President and CEO of Dundee Precious. “It
is our intention to invest the necessary resources and engage our
operations and exploration teams to apply their expertise and bring
this Project to its full production potential,” he added.
As part of Deno Gold’s plan for the development of the Kapan Mining
Project, a loan was sought and approved by the European Bank for
Reconstruction and Development for US$4.5 million after undertaking
standard due diligence. The proceeds have been used for capital
equipment and environmental improvements.
The mining operation is based on two deposits, a copper, minor
gold-silver underground mine, known as Central, and a polymetallic
deposit of copper, gold, silver, zinc and minor lead, known as
Shahumyan, which remains open at depth, to the North and possibly to
the South. It is located approximately 1.5km from the town of Kapan
and some 320km south of the Armenian capital of Yerevan. Concentrates
from the project are transported by road to the town of Ararat (60km
south of Yerevan) where they are offloaded onto the rail system for
transport to the Black Sea via Georgia.
Resources
As part of standard Soviet era practice, extensive diamond drilling
and underground development was undertaken at both the Shahumyan
and Central deposits. For example, databases compiled by Deno Gold
based on Soviet era records, indicate that over 290,000m of surface
and underground diamond drilling and 32,000m of underground channel
sampling was completed to assess the Shahumyan deposit. No drill core
remains from the Soviet era exploration programs. Based on information
compiled by Deno Gold, Soviet era reports prepared for, and reportedly
approved by, the Armenian government listed the following combined
C1 and C2 resources for the Shahumyan and Central deposits.
It is understood that the resources were compiled using a sectional,
polygonal estimation method, however, the exact estimation parameters
are not known.
As part of its due diligence process, DPM staff independently collected
over 700kg of samples throughout the accessible sections of the
Shahumyan deposit for assay, mineralogical studies and metallurgical
testwork. Assaying of the DPM samples confirmed the overall tenor of
the mineralization. In addition, mining and processing of the deposit
since Deno Gold’s acquisition of the project in 2003 has confirmed
the tenor of the deposit. DPM has also independently sampled the mill
feed and tails from the processing plant, including reference samples
from previous years of production.
DPM plans to undertake an extensive drilling programme as part of
its proposed activities in order to confirm the scale of the deposit
and to enable a NI 43-101 compliant resource to be estimated and to
be used as the source for mine scheduling as part of a definitive
feasibility study.
All resource estimates quoted herein are based on prior data and
reports obtained and prepared by previous operators and information
provided by the State. The Company has not completed the work necessary
to verify the classification of the mineral resource estimates. The
Company is not treating the mineral resource estimates as NI 43-101
defined resources verified by a qualified person. The historical
estimates should not be relied upon. These properties will require
considerable further evaluation which DPM’s management and consultants
intend to carry out in due course.
Geology and Mineralization
The prolific Tethyan Mineralized Belt passes through Southern
Armenia. The belt is host to world class porphyry copper-gold,
polymetallic vein array and epithermal gold-silver deposits. The same
belt is the host to DPM’s Chelopech deposit and the deposits of the
Bor area in Serbia.
At Shahumyan, mineralization is hosted in strongly altered dacite,
andesite and basaltic host rocks. The vein arrays at Shahumyan
cover an area of over 2.5km by 1.5km and are known to extend for at
least 400m vertical depth. The main ore minerals are chalcopyrite,
sphalerite, pyrite and minor galena. The Central deposit is a
quartz-carbonate-sulphide (chalcopyrite and pyrite) vein array with
strong similarity to porphyry related mineralization.
None of the deposits contain material quantities of deleterious
elements which would act as penalties in a concentrate.
Processing
A crushing and flotation plant has been developed at Shahumyan
using typical Soviet era construction and layouts. After primary
and secondary crushing, material is transported to a storage area by
conveyor to supply the concentrator. The current Shahumyan and Central
ore (crusher product size of 30-50mm) passes through a rod-mill,
followed by a ball mill and a small re-grind mill.
The primary cyclone overflow feeds the flotation circuit comprising
conventional Russian Denver style flotation cells to differentially
float a gold rich copper concentrate and a zinc concentrate. There
are three main thickeners, each 24m diameter, one for each type of
concentrate produced (Central mine copper, Shahumyan copper-gold
and Shahumyan zinc) and one small 8m diameter thickener serving the
un-commissioned lead concentrate circuit. Thickened concentrates are
then dried using vacuum filters producing a copper (high gold and
high silver) concentrate and a separate high zinc (gold – silver)
concentrate.
DPM’s assessment of the plant suggests that it is capable of 1 million
to 1.25 million tonnes per year throughput, and capital has been
budgeted to improve current metal recoveries.
Dundee Precious Metals Inc. is a Canadian based, international mining
company engaged in the acquisition, exploration, development and
mining of precious metals. It currently owns the Chelopech Mine,
a producing gold/copper mine, and the Krumovgrad Gold Project,
a mining development project, both located in Bulgaria, and is
engaged in mineral exploration activities in Serbia. In addition,
Dundee owns a 100% interest in the Back River gold exploration project
in Nunavut, Canada and has agreed to acquire an 80% interest in the
Kapan Mining Project in Armenia. The Company also holds a significant
and strategic portfolio of investments in the precious metals and
mineral related sector.
FORWARD-LOOKING STATEMENTS
This news release may contain certain information that constitutes
forward-looking statements. Forward-looking statements are frequently
characterized by words such as “plan,” “expect,” “project,” “intend,”
“believe,” “anticipate” and other similar words, or statements that
certain events or conditions “may” or “will” occur. Forward-looking
statements are based on the opinions and estimates of management at
the date the statements are made, and are subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected in the
forward-looking statements. These factors include the inherent risks
involved in the exploration and development of mineral properties,
the uncertainties involved in interpreting drilling results and other
geological data, fluctuating metal prices and other factors described
above and in the Company’s most recent annual information form under
the heading “Risk Factors” which has been filed electronically by
means of the Canadian Securities Administrators’ website located
at The Company disclaims any obligation to update or
revise any forward-looking statements if circumstances or management’s
estimates or opinions should change. The reader is cautioned not to
place undue reliance on forward-looking statements.
Contacts: Dundee Precious Metals Inc. Jonathan Goodman
President & Chief Executive Officer (416) 365-2408
[email protected] (mailto:[email protected])
Dundee Precious Metals Inc. Gabriela M. Sanchez Vice President
Investor Relations (416) 365-2549 [email protected]
(mailto:gsanchez@dunde eprecious.com).

ONE MORE MURDER IN YEREVAN
ArmRadio.am
10.08.2006 14:44
One more scandal murder occurred in Yerevan, capital of the Republic
of Armenia, Arminfo reported.
The General Prosecutor’s Office reports that today the corpse of
businessman Armen Grigorian was found in his own apartment. The hands
and legs were bound. The skull was fractured in certain places. A
criminal case is roused.
From: Emil Lazarian | Ararat NewsPress

ARMENIA: MULTI-ETHNIC MATCHES SPURNED
ArmRadio.am
10.08.2006 15:15
Armenia is a practically mono-ethnic state, with very few instances
of mixed marriages, which makes those who do make inter-racial matches
stand out all the more.
“I bring up my children in the spirit of Christianity and I tell them
that all people are equal, regardless of the colour of their skin
and their faith,” said Anna, who lives in Yerevan with her Nigerian
husband Michael and their two small sons Joseph and James.
The two dark-skinned boys do suffer racial abuse in their kindergarten
or on public transport. “I just get furious when they call my children
‘negroes’,” she said.
“I don’t feel comfortable in Yerevan,” added Michael, who despite
owning his own business, an Internet café, wants to take his family
away from Armenia to a more multi-racial society.
Despite living in Armenia for nine years, Michael has not integrated
well and speaks only a few phrases of Armenian.
Michael and Anna’s was the first marriage officially registered
between an African and an Armenian, more than ten years ago and it
is still a very rare case in Armenia.
Ethnographer Hranush Kharatian, who heads the Armenian government’s
department on national minorities and religious issues, notes that
Armenians comprise 97.8 per cent of the population and that they have
little experience of interacting with other nationalities.
She also said that an ancient tradition of self-preservation and
of fostering national identity in the face of adversity had served
Armenia well but carried with it suspicion towards foreigners who
wanted to marry ethnic Armenians, both in Armenia itself and in the
worldwide diaspora.
Yet this attitude, she said, is prevalent in a society, which suffers
from huge migration problems.
“I think foreigners in Armenia will definitely encounter problems,”
Kharatian went on. “Our state does not have an active immigration
policy, there is no discussion of attracting new workers or stimulating
population growth. We don’t have gaps in our workforce, on the contrary
we don’t have enough jobs.
“A person who has an unusual appearance or whose skin is a different
colour tries to lead the life of an ordinary citizen, but the extra
attention he gets from society makes his life public property.”
According to official statistics, in the 18 months between January
2005 and the end of June 2006, there were 864 marriages between
Armenians and foreigners out of a total of 20,000 unions overall.
“I think any of our women who marry blacks are our enemies,” said
a middle-aged man with higher education questioned by IWPR on the
street in Yerevan. ” Armenian blood should not be mix with the blood
of blacks. If you marry a foreigner then he should at least be white.”
His view was typical of many ordinary Armenians asked to comment on
the issue.
Murtada came to Armenia from Sudan nine years ago as a tourist and
married an Armenian named Naira. They live in Yerevan and Murtada,
who trained as an economist, works as a driver.
“I’m not concerned by the extra attention that gets paid to us, but
I worry about Murtada,” his wife told IWPR. “He is a very sensitive
person and he can be insulted by a sideways glance.”
“I can’t hide the colour of my husband’s skin,” she went on, expressing
hope that their son Bashir, who speaks Armenian like a native will
not suffer from the same problems as his father.
Mira, who is Korean, moved from Moscow to Armenia with her Armenian
husband Ashot. She said that the two of them, both artists, had
encountered few problems and had had more trouble in Georgia, where
they also lived for several years.
Ashot acknowledged that it was easier for his wife, an Asian, to fit
into Armenia than for an African to do so. But he said he was worried
by the country’ s intolerance towards foreigners. “The more developed
a country is the better it treats its foreigners. Poorly developed
countries put obstacles in the way of foreigners,” he said.
“We need time to live together so that Armenians get used to the idea
that black-skinned people can adapt to our way of life, speak Armenian
and live like Armenians,” said Vladimir Mikaelian, a psychologist.
He argued that Armenian ignorance about foreigners stemmed from lack
of historical experience rather than sheer prejudice. “We know the
customs of Arabs, Turks and Persians,” he said. “And we get our ideas
about black people from the media and ascribe to them traits which
we learn about second-hand.”
Mikaelian also mentioned a good example of racial prejudice being
overcome: the popular television performer Hrant Hovsepian, known as
Blond, who has an Armenia mother and African father.
“If Armenia wants to develop then it ought to understand that, one way
or another, foreigners will keep on coming here,” said Elza Guchinova,
who is herself an ethnic Kalmyk and is doing comparative research
on the mono-ethnic societies of Armenia and Japan. “[Urban centres]
all over the world are ethnically diverse and it’s impossible to stop
this process.”
–Boundary_(ID_xHPHKRO80STnmENG8Jb C2w)–

OLIGARCHS PAY TAXES AT THE EXPENSE OF TAXPAYERS RATHER
Aram Zakaryan
Lragir.am
10 Aug 06
We have already reported relying on the official statistics of 1000 big
taxpayers that the native oligarchs, operating in the black economy,
have started paying less taxes to the government, which means only
one thing – the guys are preparing for the election, the slush funds
are collected. And even a superficial study of the pattern of taxes
paid by the same oligarchs reveals that the oligarchs, who generally
pay very little taxes, a greater part of what they pay is from the
purse of the other taxpayers, i.e. common people, and only a small
part is from their own pockets.
The share of indirect taxes, namely the VAT and the excise tax,
included in the price of goods and services, prevails in the pattern
of taxes paid by all the oligarchs of Armenia. In other words, all
of us pay these taxes, which are included in the price of a product
or a service. In the meantime, direct taxes, such as income tax,
profit tax, are paid by the seller of the product or service.
First, there are companies which did not pay the VAT or the excise tax,
namely City Petrol importing gas to Armenia, and Pares Armenia.
At one time, Natali Pharm owned by Samvel Alexanyan, importing
medicine, did not pay the excise tax, whereas in the first half of
2006 this company paid 326.698 million drams of VAT and excise tax,
and then 4.5 times less income tax and profit tax, totaling 68.157
million. The sugar importing Fleetfood owned by Samvel Alexanyan
also paid part of its taxes at the expense of its customers. It
paid 261.608 million drams of VAT and excise tax and 7.8 times less,
37 million drams of income tax and profit tax.
The same situation is with the businesses run by Mikhail Baghdasarov,
referred to as a close oligarch of Serge Sargsyan. Mika Cement paid
244.827 drams of indirect taxes, and 0 drams from its own purse.
Armavia paid VAT and excise tax of 76.9 million drams and over three
times less direct taxes, 22.935 million drams.
The amount of VAT and excise tax paid by Gagik Tsarukyan’s Multi
Leon totaled 67.247 million drams, and the income tax and profit tax
was 2.585 million drams. Ararat Wine, Vodka and Brandy also paid 2.5
less direct taxes than indirect taxes. There is reliable information
that Jermuk Group owned by Republican Ashot Arsenyan, the sponsor of
unofficial leisure of Prime Minister Andranik Margaryan during his
foreign visits does favor and charity to the prime minister at the
expense of Jermuk drinkers. This company paid 189.504 million drams
of VAT and excise tax and 9 times less, 19.6 million drams of income
tax and profit tax. Another oligarch, new Republican Levon Sargsyan,
is also a miser when his own purse is concerned. His Yerevan Mill
paid 110.754 million drams of indirect taxes and only 5.8 million
drams or 20 times less from its own income and profit. His Vedi Alco
paid 216.186 million drams of indirect taxes and 21 times less, 9.690
million drams from its own income and profit. Getap Winery owned by
Levon Sargsyan paid 52.8 million drams of indirect taxes and 16-17
times less, 3.450 million drams from its own income and profit.
Artashes Tumanyan’s Mets Aniv, Mher Sedrakyan’s Erebuni Alco, Areg
Ghukasyan’s Salt Factory of Avan, Attorney General’s friend Lyova
Sargsyan’s Concern Energy, Shant + owned by another friend of Attorney
General’s, Lusakert Poultry Farm owned by Harutiun Pambukyan who became
Republican for the sake of Serge Sargsyan and other pro-governmental
oligarchs organize their companies and taxes similarly.

“EU WILL SOON WANT TO JOIN ARMENIA”: BUSINESS IS TRYING TO FIND POSITIVE THINGS IN DOLLAR EXCHANGE FALL
Regnum, Russia
Aug. 9, 2006
The process of impetuous US dollar devaluation in Armenia has
negatively affected business of local manufacturers. For the last
ten days, US dollar lost about 20 points in Armenia and by August
9 it can be sold for 390 dram and bought for 400 dram at Yerevan
currency exchanges.
Talking to a REGNUM correspondent, MP, head of MAP Company (agriculture
produce processing) Alik Petrosyan noted that dollar devaluation,
first of all, affects negatively cost of the goods. “We buy grapes
at the national currency and export our brandy for dollars, so we
have been suffering significant losses,” the businessman says noting
he sees no way out of the situation. “We cannot stop production and
continue buying raw stuff. In case, dollar exchange rate reaches
the supposed 350 dram, the company will have to raise the price,
but our produce will become noncompetitive. We are facing a dilemma:
either we continue production or stop functioning.
I even do not know what to do,” he notes.
According to an expert who preferred to stay anonymous, Armenia’s
Central Bank is unable of influencing the situation, as it has no
tools for it. “Armenia’s Central Bank has been pursuing a wrong policy
in many cases, but it would be incorrect to put the full blame on
it in this situation. The Central Bank should pursue a policy of
targeting inflation, but not imitating it,” he said. It is worth
mentioning, the Armenian Central Bank pursues a policy of floating
dollar exchange rate. According to many experts, strengthening of
Armenian dram is caused by huge dollar flows into Armenia, which is
particularly connected with large amounts of construction as well as
with the tourist season.
According to economist Eduard Agadzhanov, for the first half of
2006 US dollar has devaluated almost by 10%, and for the last three
years by 40%. “Strengthening of the national currency has resulted
in forcing out domestic manufacturers from the domestic market,”
the economist notes adding that each year the foreign trade deficit
has been increasing. In the first quarter 2006 only the showing was
over $0.5 billion.
Talking to the REGNUM correspondent, one of Armenia’s prominent
businessmen, who preferred to keep incognito, probably, because of
the original nature of his comment, said that the “dollar-dram story”
will end in “leveling of the national currency exchange rate to the
US dollar, one to one.” “In this case, it will turn out that salary
of 150,000 dram ($350-400) will automatically grow to $150,000, and
Armenia will become the best country in the world. If it happens,
we shall meet the most important standards for entering the European
Union. Or, to be more precise, the EU will want to join us,” the
businessman notes.