U.S. PLANS TO HELP ARMENIA OVERCOME POVERTY IN AGRARIAN SECTOR

Today, Azerbaijan
April 13 2006

U.S. delegation arrived in Yerevan on Wednesday to present a grant
provided by the U.S. administration to Armenia under the Millennium
Challenges programme.

The 235 million U.S. dollar grant will be used to fight poverty in
Armenia’s agrarian sector, Itar-Tass reports.

Armenian President Robert Kocharyan received the delegation to thank
the U.S. government for its financial assistance. He believes that
the programme “is very important, because it may help to bridge the
gap in living standards between the capital and rural areas.”

The Chairman of the Appropriation Subcommittee for Foreign Assistance
at the U.S. House of Representatives, Jim Kolbe, said at a news
conference that the South Caucasus is the region that has a bright
future and may develop successfully if there is peace between its
countries.

He said the U.S. would not have started the programme, had it been
not confident of Armenia’s committment to free and fair parliamentary
elections next year and presidential elections in 2008, Kolbe said.

The U.S. will closely watch the implmentation of the programme and
reforms in Armenia, Millennium Challenges Executive Director John
Danilovich said.

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BUDAPEST COURT SENTENCED AZERI MILITARY OFFICER RAMIL SAFAROV TO LIFE IMPRISONMENT
Author: E. Javadova

TREND Information, Azerbaijan
April 13 2006

On April 13 Budapest court has sentenced Azeri military officer Ramil
Safarov to life imprisonment, legal representative of Mr Safarov’s
family, lawyer Adil Ismaylov told Trend.

The sentence passed by Judge Andrash Vashkuti says within the framework
of NATO program “Partnership in the name of peace” Azeri military
officer Ramil Safarov was sent by the Ministry of defense to Hungary
for participation in English language trainings in January-February
2004. Several days before the end, on February 19, he slaughtered
Armenian officer Gurgen Markaryan with an axe.

The Judge said the results of the expert review submitted to the
court prove Mr Safarov to have been sane that moment.

Mr Ismaylov said also that after receiving the court decision by
Hungarian lawyers they will appeal to the higher legal instances.

We remind that the court four times arranged an expert review of
Mr Safarov’s psychological state. The review results showed some
discrepancy. First results blaming Mr Safarov were not accepted by
the judge. Hungarian legislation allows only three reviews to arrange
by the judge. But the judge violated the law and arranged the fourth
expert review. The last review concluded that at the moment of crime
and afterwards Mr Safarov was in a sound mind. The lawyers said the
judge had been biased and the last review was conducted incorrectly.

In his last words Mr Safarov did not admit his guilt and said the
reason for murder was the deep offense of state flag of Azerbaijan
by G. Markaryan and his rude words in address of Azeri people.

PRESIDENT ILHAM ALIYEV VISITED SHEKI TODAY

Azeri Press Agency, Azerbaijan
April 13 2006

President Ilham Aliyev has visited Sheki within his visit plan to
north-east region of Azerbaijan.

According to reporters from Sheki, President’s visit to Sheki
started in acquaintance with exhibits in Heydar Aliyev Museum in the
center of the city. Making a speech before the residents Mr.Alliyev
pointed out that government pays much attention to social-economic
development of regions. Noting the main problem in the country to
be unemployment and poverty, the state head stressed the planned
measures for liquidating of all these. According to Ilham Aliyev,
economic development of Azerbaijan last year reached to economic
indicators of 90s. Part of job places –350 thousand in the country,
according to President, falls to the share of Sheki, added that new
job places will be opened. The state head pointing out valuable
cultural-historical monuments in Azerbaijan, President said that
part of the analogical monuments in Sheki is repaired and part of
them will be repaired under the order of the President. Mr.Aliyev
in his speech has touched on the problem of destruction of claimed
Armenian monuments in Julfa: “This is fiction of Armenians. In fact,
historical monuments, mosques are destructed in the territories
of Azerbaijan occupied by Armenians. Last year when Fact-Finding
Mission of OSCE visited those places they did not find any safe
monument of Azerbaijan.” The state head of Azerbaijan has stated that
Armenians have always been busy in slander against Azerbaijan. Dealing
with religious endurance in Azerbaijan, Ilham Aliyev said that new
Catholic Church will be built in Azerbaijan recently. President Ilham
Aliyev after visiting Sheki Khan’s Palace visited “Sheki-Silk” Open
Joint Stock Company where he was informed about the activity of the
enterprise. It should be noted that the enterprise is employed 1600
employees being in general capacity of produce of 75 ton. The state
head within his visit framework concerned construction of module
type electric station which is built in Sheki. The state head was
informed that the electric station in the capacity of producing 87MVT
energy will be put into operation in August this year. President has
familiarized with the activity of brick plant with daily produce of
50 thousand number bricks where 130 employees work.

Azerbaijani President participated in a business-forum Sheki
Olympic Complex. Making a speech before Entrepreneurs said that all
round condition should be provided to entrepreneurs in Azerbaijan:
“Executive Power should not interfere the work of entrepreneurs. If
anybody wants to be busy with your business, do not let it, then
apply to law-enforcement bodies, in case of necessity you can apply
to me. Azerbaijani president supports Entrepreneurs. I ask you not
to be silent if you face this situation.” Credit in the amount of 813
thousand AZN was given to 11 entrepreneurs from – – Sheki, Zagatala,
Gakh, Balaken, and Gabala. At the end of the visit to north-east region
the President of Azerbaijan Ilham Aliyev has held regional briefing
after which two-day visit program to Sheki-Zagatala was completed.

ROAD TO WTO FULL OF CHALLENGES

AzerNews Weekly, Azerbaijan
April 13 2006

Prospects for Azerbaijan’s joining the World Trade Organization (WTO)
and economic development were in focus at the event, “The World Trade
Network and Azerbaijan,” in Baku last Wednesday.

Addressing the meeting, Emil Majidov, president of the Azerbaijan
Export & Investment Promotion Foundation (AZPROMO) organizing the
event, said local entrepreneurs were poorly aware of WTO and the
discussions targeted briefing the participants on the economic
processes ongoing around the world.

Deputy Economic Development Minister Mikayil Jabbarov said an
action plan had been prepared for local businessmen on Azerbaijan’s
forthcoming accession to WTO. The country is currently experiencing
a stage that is pivotal for its admission to the organization, he said.

Deputy Foreign Minister and chairman of the taskforce on WTO
admission, Mahmud Mammadguliyev, reminded that Azerbaijan has held
the status of observer in WTO since talks on its admission started
in 1997. The next round of talks is due in late 2006-early 2007,
Mammadguliyev said. Four meetings of the joint taskforce have
been held thus far, with the first two focusing on foreign trade
regulations, while full-scale negotiations on WTO admission started
in 2005. The separate discussions with other countries center on
the access of foreign goods and services to Azerbaijan’s markets,
while multi-lateral talks aim to support agriculture and export
subsidies in this sector. The WTO requires that common regulations
be introduced for both imported and local commodities and services,
including equal excise rates. Mammadguliyev said customs duties are
a key measure to protect the domestic market and Azerbaijan should do
its best to ensure suitable conditions for local producers. The deputy
minister told reporters after the discussions that the government
will do its utmost to ensure that Azerbaijan is admitted to WTO
with a status of a developing country, which will provide certain
concessions, in particular, on the agricultural sector. The talks to
that end have already started and the needed arguments submitted to
the WTO secretariat for consideration, Mammadguliyev said. “During
the comprehensive discussions, Malaysia and Australia supported our
admission with this status. But the United States and the European
Union avoided comment. We will further work to make sure that the USA
and EU back our stance.” Mammadguliyev said the U.S. and EU suggest
that the services sector be liberalized to promote foreign investments
in the Azeri economy and open jobs. The activities include expanding
markets in finance, communications and distributor services. He
said that in spite of lucrative advantages in the WTO membership,
the country should focus on protecting its own interests.

“Our position aims to ensure further development of the country,
therefore, we will dwell upon national interests during the talks. We
should reach a compromise that would suit both the EU and USA, and
Azerbaijan.” The Foreign Ministry official continued that one of the
priority issues for WTO admission is improving laws, as this is at
the core of the recommendations made to the country. “The legislative
improvements should be enacted over two years at the most, as the
completion of talks and subsequent WTO admission will depend on this,”
he said, adding that although the issue is regularly raised during the
talks, WTO is still concerned over the lack of such changes. Touching
upon the possible obstacles that may be posed by WTO member state
Armenia, with which Azerbaijan faces the long-standing conflict over
Upper (Nagorno) Garabagh, Mammadguliyev said this is not likely. “Upon
its admission, Armenia assumed a commitment not to veto Azerbaijan’s
inception,” he said. The deputy minister said any talks with Armenia
on the matter are certainly out of the question, as the two countries
maintain no ties. Mammadguliyev told the press earlier that Armenia’s
admission to the WTO prior to that of Azerbaijan is due to the fact
this country started relevant talks four years earlier, in 1993. He
added that countries’ accession mainly depends not on their economic
indicators, but on how fast they fulfill their obligations to the
organization.

3RD STAGE OF RECONSTRUCTION WORK OVER RA POLICE TRAINING CENTER BEGINS ON APRIL 13

ARKA News Agency, Armenia
April 12 2006

YEREVAN, April 13. /ARKA/. The third and final stage of reconstruction
work over the training center of the RA Police has begun on April
13. According to the Yerevan office of the OSCE, reconstruction work
is done in the framework of large-scale OSCE program on support to
the RA Police.

The program has three main directions, namely reconstruction of
the training center of the RA Police, working out of the curriculum
of the training center in accordance with international standards
and introduction of a model of communal police into one of Armenian
communities. Reconstruction work is supported by the Governments of
USA, Belgium and Sweden.

The head of the Yerevan office of the OSCE, Ambassador Vladimir
Pryakhin, First Deputy Chief of the RA Police, Major-General Ararat
Makhtesyan and US Vice-Ambassador to Armenia Anthony Godfree will
take part in the event.

STRENGTHENING TIES WITH US CONGRESS IMPORTANT, ARMENIAN NA SPEAKER STATES

ARKA News Agency, Armenia
April 12 2006

Yerevan, April 12. /ARKA/. At his meeting with Chairman of the Foreign
Allocations Subcommittee, Chamber of Representatives, US Congress,
Jim Colby and Head of the “Millennium Challenges” corporation John
Danilovich, Speaker of the RA Parliament Artur Baghdasaryan pointed
out the importance of strengthening ties between the RA Parliament
and the US Congress.

Baghdasaryan pointed out the necessity of deepening the dialogue and
the importance of the RA Parliament’s involvement in the programs
implemented on the initiative of the US Congressional committee for
facilitation of democracy.

In his turn, Jim Colby promised assistance to Armenia in this matter.

“TRANSPARENT ELECTIONS”: NK: A PLAN FOR PEACE – EUROPE REPORT N°167

Ïðaâî Âûaîða, Azerbaijan
Democratic Azerbaijan
April 13 2006

Settlement of the long running Nagorno-Garabagh conflict – the most
significant obstacle to stability in the South Caucasus – remains
elusive, despite more optimistic noises recently from Azerbaijan and
Armenia. Eleven years after the 1994 ceasefire, burgeoning defence
budgets, increasing ceasefire violations, and continuing demonisation
by each side of the other side are ominous signs that time for a peace
agreement is running out. But a compromise can now be constructed
around an approach that, while addressing all the matters in dispute,
leaves the core issue of Nagorno-Garabagh’s ultimate status open for
later resolution, after other measures have been put in place.

Key elements of that proposed settlement package include the
withdrawal of the Armenia-backed Nagorno-Garabagh forces from
the occupied districts of Azerbaijan surrounding the entity; the
renunciation by Azerbaijan of the use of force to reintegrate the
entity; the deployment of international peacekeepers; the return
of displaced persons; and the re-opening of trade and communication
links. Nagorno-Garabagh’s status should ultimately be determined by an
internationally sanctioned referendum with the exclusive participation
of Karabakh Armenians and Azeris, but only after the above measures
have been implemented. Until then Nagorno-Garabagh would remain part
of Azerbaijan, though in practical terms it would be self-governing
and enjoy an internationally acknowledged interim status.

Today Armenia and Azerbaijan remain divided on vital points.

Azerbaijan does not accept any compromise of its territorial integrity,
nor does it agree that Nagorno- Garabagh’s population alone can vote
on determining its final status. Armenia is not willing to support
withdrawal from the seven occupied districts around Nagorno- Garabagh,
or allow the return of Azerbaijan internally displaced persons (IDPs)
to Nagorno-Garabagh, until the independence of Nagorno-Garabagh is a
reality. There has been tentative discussion of a possible plebiscite
to determine the entity’s final status, but with none of the necessary
detail agreed as to who would vote on what, when and how, nor any
agreement as to what other settlement conditions would create the
context for such a vote.

The Minsk Group of the Organisation for Security and Cooperation in
Europe (OSCE), currently co-chaired by France, Russia and the U.S.,
has been facilitating negotiations since 1994. After a decade of
fruitless talks, a new format of meetings, the Prague Process,
involving direct bilateral contact between the foreign ministers
of Armenia and Azerbaijan was initiated in 2004. During the past
twelve months the participants and OSCE co-chairs alike have publicly
expressed optimism that a deal can be reached soon. But there is an
urgent need to translate that generalised optimism into very specific
agreement and action.

An earlier Crisis Group report explored how the Armenian and Azeri
communities of Nagorno-Garabagh and the surrounding districts live
today and view resolution of the conflict. Against that background,
this report examines the causes of the Nagorno-Garabagh conflict,
analyses the OSCE-led negotiations process as it has evolved since
1992, and identifies the necessary elements of a workable and
achievable peace plan.

Recommendations To Avoid a Resumption of Fighting: 1. All parties to
the conflict should respect the 1994 ceasefire, refrain from using
force, not promote the use of force, and end the arms race in the
region by halting the rise of defence budgets.

To Create an Appropriate Environment for Conflict Settlement:
2. Azerbaijan should resume direct contact with the de facto
Nagorno-Garabagh authorities and facilitate the development of closer
contact between Garabagh Azeris and Garabagh Armenians.

3. The de facto Nagorno- Garabagh authorities should end support
for settlement of formerly Azeri majority areas with Armenians,
including by: (a) stopping privatisation of land, homes and businesses
in those areas; (b) ceasing to establish local administrations and
infrastructure in the occupied areas adjacent to Nagorno-Garabagh;
and (c) protecting the remaining Azeri homes.

4. Armenia should encourage the de facto Nagorno-Garabagh authorities
to take a more conciliatory stance on resolution of the conflict.

To Address the Substantive Matters in Dispute: 5. The parties
should sign an agreement that includes the following elements:
(a) renunciation of the threat or use of force to settle disputes,
including any that may arise in connection with the implementation of
the peace agreement; (b) creation of a joint commission including
Azerbaijan and Nagorno-Garabagh representatives and chaired by
the OSCE to supervise implementation; (c) incremental withdrawal
of Nagorno-Garabagh forces backed by Armenia from all occupied
territories around Nagorno-Garabagh, but beginning with five districts
and occurring simultaneously with the deployment of international
peacekeepers; (d) withdrawal of Nagorno-Garabagh forces backed by
Armenia from the Kelbajar district once appropriate security measures
are in place at the Murov mountain pass, and from the Lachin district
following agreements guaranteeing secure communications through
the Lachin corridor; (e) safe and voluntary return of displaced
persons to their pre-war homes in the formerly occupied districts,
once withdrawal and international deployment have been completed;
(f) assurances for free movement of people and goods, including
the lifting of all blockades and the reopening of all transport and
trade routes (road and rail) closed as a result of the conflict; (g)
implementation of confidence-building measures in cooperation with
international organisations including the UN, International Committee
of the Red Cross, OSCE and non-governmental organisations; and (h)
identification of a referendum mechanism for resolving the final
status of Nagorno-Garabagh, as set out below, with provision until
then for the entity to have internationally recognised interim status,
and its governing bodies to be elected under international supervision.

6. The final status of Nagorno-Garabagh should be decided by a
self-determination referendum, which would: (a) be held after
the return of displaced Azeris to former Azeri-majority areas in
Nagorno-Garabagh and after an international conference determines
that Nagorno- Garabagh has met international preconditions for
statehood, including the protection of minority rights, such review
to be conducted for the first time five years after the signing of
the peace agreement; (b) give Nagorno- Garabagh an appropriate range
of options, including unity with, and secession from, Azerbaijan;
(c) be held with the exclusive participation of Garabagh Armenians
and Azeris; and (d) have its exact modalities agreed upon in talks
chaired by the OSCE, based on the principle that all parties will
recognise the validity of its result.

To Facilitate Public Acceptance of the Settlement: 7. Azerbaijan should
allow Garabagh Azeris to play a bigger role in the negotiations and the
internal political process, including by passing legislation allowing
Garabagh Azeris to elect the head of their community, ensuring voting
rights for displaced persons in the 2005 parliamentary elections,
and permitting all candidates to campaign in collective centres.

8. Government officials and media in Azerbaijan and Armenia should
refrain from using belligerent and xenophobic language against
“the other”.

9. Officials involved in the negotiations process should agree to
a broad common strategy for disseminating information about that
process, coordinate efforts to present to the public elements of a
possible agreement, and not be reluctant to start a debate on highly
sensitive questions.

To Build Confidence and Guarantee Sustainable Peace: 10. Donors should
assist Armenia and Azerbaijan in developing and carrying out small,
cross-border, sub-regional trade, humanitarian and public health
projects, including in response to disasters, and should fund and help
carry out programs aimed at improving mutual understanding, tolerance
and reconciliation that target civil society, teachers and journalists.

11. Donors should carry out a common assessment mission of needs in
Nagorno- Garabagh and the adjacent occupied districts, and once a peace
agreement is signed should hold an international donor coordination
conference and begin implementing projects in the former conflict zone.

12. Armenia and Azerbaijan should each investigate war crimes,
prosecute those responsible and adopt legislation to give amnesty
to those who participated in the conflict but did not commit serious
offences.

13. Armenia and Azerbaijan should establish joint commissions to:
(a) make a political assessment of the conflict’s causes and
consequences; and (b) deal with inter-state property return and
compensation questions.

To Increase the Prospects for a Peace Agreement and to Give It
Stability: 14. The UN Security Council, the OSCE and the EU Council of
Ministers should pledge to serve as guarantors of the peace agreement.

15. The OSCE should expand the mandate of the Personal Representative
of the Chairman-in-Office to include working with civil society,
media and opposition political forces in order to facilitate contacts
between the sides at the local level and build confidence and opening
an office in the occupied territories, staffed with political, human
rights and elections officers.

16. The EU should become more actively engaged in the conflict
resolution effort by basing the office of its Special Representative
for the South Caucasus in the region.

17. The EU should include long-term programs and strategies to promote
confidence building in its Action Plans with Armenia and Azerbaijan.

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HEADS OF “GASPROM” AND “ARMRUSGASPROM” DISCUSS BRINGING INTO EFFECT AGREEMENT ON STRATEGIC PRINCIPLES OF COOPERATION IN MOSCOW

ARKA News Agency, Armenia
April 13 2006

YEREVAN, April 13. /ARKA/. The President of “Gasprom”Alexei Miller and
General Manager of the “ArmRusgasprom” CJSC Karen Karapetyan discussed
bringing into effect agreement on strategic principles of cooperation
between the holding and the RA Government the overnight in Moscow.

According to the Public Information Department of the “Gasprom”, during
the working meeting Miller and Karapetyan paid special attention to
the issue of purchase and accomplishment of the Hrazdan HPP’s 5th
block for effective gas processing into electricity on the territory
of the republic.

On April 6, “Gasprom” and the RA Government signed an agreement for
25 years defining strategic principles of cooperation in gas-energy
projects on the territory of Armenia. The document envisages purchase
of the 5th power-unit of the Hrazdan heat power plant (Hrazdan-5)
from the RA Government by the “ArmRusgasprom” CJSC, as well as objects
of gas sphere of the republic. The agreement fixes the possibility
of exporting electricity produced by Hrazdan-5. It also fixes the
price for the Russian gas imported to Armenia equal to $110 for 1
thsd cubic meters of gas till January 2009.

Preliminary agreements on sell-purchase of must be signed till April
14, 2006, and the final passing of the property must be finished till
January 1, 2007.

IMPLEMENTATION OF MILLENNIUM CHALLENGES CORPORATION’S PROGRAM IN ARMENIA TO CONTRIBUTE TO REGIONS’ DEVELOPMENT

ARKA News Agency, Armenia
April 13 2006

Yerevan, April 13. /ARKA/. The implementation of the Millennium
Challenges Corporation’s program in Armenia will essentially
contribute to the development of the country’s regions and rural
poverty reduction, Speaker of the RA Parliament Artur Baghdasaryan
stated at his meeting with a US delegation, which includes Chairman
of the Foreign Allocations Subcommittee, Chamber of Representatives,
US Congress, Jim Colby and Head of the “Millennium Challenges”
corporation John Danilovich.

During the meeting, Speaker Baghdasaryan pointed out the importance
of the program in the following directions: regional development and
bridging the development gap between the capital and the regions,
democratic development and introduction of public control mechanisms.

Speaker Baghdasaryan expressed gratitude to the US Government for its
consistent assistance in the country’s democratization. “Armenia’s
economic and democratic development must be simultaneous,” Baghdasaryan
said.

The sides pointed out the importance of the program for Armenia’s
democratic development on the threshold of the 2007-2008 elections.

In their turn, Danilovich and Colby addressed democratic reforms
and economic development of Armenia. They pointed out the existence
of political will for the development of the reforms, ensuring of
political freedoms, rule of law and transparency in the implementation
of the program. They also pointed out the necessity of holding
elections in conformity with the international standards.

Danilovich re-affirmed the determination of the US Government and of
the Millennium Challenges Corporation to be guided by the fundamental
principles of Armenia’s involvement in the program.

The agreement on the allocation of $235.5mln to Armenia under the
Millennium Challenges Corporation program was signed in Washington,
USA, on March 27, 2006. The document was signed by RA Minister of
Finance and Economy Vardan Khachatryan and Head of the Millennium
Challenges Corporation John Danilovich.

CYPRUS-ARMENIA TO BOOST COOPERATION IN BANKING

Reporter, Greece
April 13 2006

15:34 – 13 April 2006 – The central banks of Cyprus and Armenia signed
Thursday a memorandum of understanding (MOU) to boost cooperation in
banking sector. The deal was co-signed by Christodoulos Christodoulou
and Tigran Sargsyan, governors of the Cypriot and Armenian banks.

An official statement said the document defines a general framework
of mutual cooperation and exchange of information between the
two supervisory authorities over supervision of cross- border
establishments and credit institutions.

In the field of banking supervision, the Central Bank of Cyprus has
signed MOU with more than 10 countries’ central banks, which have or
may have presence in Cyprus.

Moreover, negotiations are ongoing with another 10 overseas banking
supervisory authorities on the signing of similar documents, the
statement added.