BTC AS “SECURITY GUARANTEE” FOR NAGORNO KARABAKH: INTERVIEW WITH IVAN DANILIN
Regnum, Russia
June 7 2006
Ivan Danilin – senior researcher of the Institute of World Economy
and International Relations of the Russian Academy of Sciences
REGNUM: Mr. Danilin, during their last summit in Kiev the GUAM
member-states proposed giving up the idea to operate the Odessa-Brody
oil pipeline on a reversion basis and returning to the initial idea
to supply Caspian oil via Ukraine to Europe. How realistic is this
prospect given Azerbaijan’s position? What is the export potential
of Azerbaijan?
Azerbaijan will hardly be able to join Odessa-Brody in the mid-term
future because this project is technically and financially difficult.
To get geo-politically and economically expedient, this pipeline
should be prolonged to Plock, a Polish city having an oil refinery.
Besides, it is still unclear who will pay for the more expensive
Azeri oil: it will be more costly than the Russian oil because of
transshipments in Supsa and Odessa. It is also unclear if Azerbaijan
will find enough oil for Odessa-Brody (-Plock) – in fact, it can’t
supply enough even for BTC and will hardly be able to till 2007,
at earliest.
Today Azerbaijan is a significant but not very big fuel supplier in the
world. According to various forecasts, after 2008 Azerbaijan will be
able to supply some 35-40 mln tons a year via BTC. True, Azeri experts
say that they have found some new capacities at Azeri-Chirag-Guneshli
but they will be able to specify them only after prospecting. Speaking
of the importance of the Azeri oil, we can just say that, even at
its full capacity, BTC will ensure only 1.5% of the world oil supplies.
REGNUM: What does the launch of BTC mean for the world and the
region? What are the chances of Kazakhstan’s joining the project?
Internationally, the BTC launch has rather small consequences. The
key result of BTC is that the post-Soviet states have taken
a psychologically important step outside the Russian oil transit
monopoly in the post-Soviet area.
This is a good stimulus for the development of an alternative export
system, and Kazakhstan will certainly try to join it. For Astana, BTC
(especially when it is extended) will become not so much the “main
window” into the world (something they in Russia were afraid of)
as an additional though significant channel it can use to diversify
its oil transit routes.
One can’t say that the launch of BTC will drastically change the
situation in the South Caucasus or Central Asia.
For the region, BTC is of dual significance. On the one hand, it will
strengthen the positions of Azerbaijan and, partly, of Georgia. Baku
will get less dependent on Moscow. On the other hand, the situation
is not as clear as it seems. First, if formerly Baku was heavily
dependent on US support in the BTC project, now that the Azeri oil
has got access to the world markets, this dependence will go into the
past. It is also clear that BTC will not be able – as one might expect
before – to make, say, Georgia independent from Russia in finance and,
consequently, in energy and economy.
Meanwhile, BTC will obviously enhance stability in the region. One
can’t but agree with some Armenian representatives who have been
saying for two years already that BTC is “a security guarantee”
for Armenia and – let’s add – Nagorno Karabakh. Its closeness to the
Nagorno-Karabakh and Armenian borders reduces the possibility of a
large-scale armed conflict in the region.
REGNUM: Since recently GUAM is called energy NATO. Do you agree with
this term, if yes what can Russia counterpoise to this bloc in energy?
“Energy NATO” is not very correct term for the Organization for
Democratic Development-GAUM (ODD-GUAM). Energy NATO is generally
applied to the informal Poland-led union in Eastern and South-Eastern
Europe (initiated during the January Summit in Davos).
In fact, given the mostly political demand for the Caspian
oil in Ukraine, Moldova, Poland – GUAM may try to carry out the
Odessa-Brody-Plock project or simply supply Azeri oil to Ukraine (with
an oil refinery to be set up in Odessa). All this depends on whether
the US and the EU will lend money for the completion and operation of
the Odessa-Brody-Plock oil pipeline and on whether Ukraine, Moldova
and Poland will be able to afford the expensive Caspian oil.
This scenario is hardly possible but may well be if the world oil
prices continue to grow and if Russia continues toughening its energy
policy. Much more realistic is the project of moderate supplies of
Azeri oil to the Odessa oil refinery – but still not in the near
future.
REGNUM: How topical is the Burgas-Alexandroupolis project and why is
it being delayed?
The key problem of this project is, like in the case of Odessa-Brody,
multiple (in the case of Burgas-Alexandroupolis – triple) oil
transshipment. This makes the project more expensive and the Russian
oil less competitive as compared with the Azeri oil from BTC.
Under new conditions Russia is staking on the northern route (the
Baltic pipeline system), but is also considering alternatives – Italy
is already drafting a Samsun-Ceyhan project for Russian oil. There
are other scenarios too.
On the whole, the prospect of this project is still very vague and
like in the case of Blue Flow, Russia may prefer (at least partly)
to use the “Turkish transit” – as, in any case, Burgas-Alexandroupolis
will not be able to “cover” the whole southern transit of the Russian
oil. Meanwhile, the “Turkish scenario” is not desirable geo-politically
as it will change nothing in the price scheme. As you may understand,
the Russian authorities are wavering, but delay may cost them dear,
especially as Turkey is obviously planning to further toughen its
Bosporus and Dardanelles transit regime.

BRYZA: “TRANS CASPIAN GAS TRANSPORTATION BY COMPETITION IS REMARKABLE”
Today, Azerbaijan
June 7 2006
“Trans Caspian gas transportation by competition is possible and
remarkable,” Matthew Bryza, US Deputy Assistant Secretary for European
and Eurasian Affairs, has told in his speech to the media.
According to APA, Mr. Bryza has stated that Azerbaijan must reach
maximum gas production by 2012 to have the share in the market. As
to intention of Caspian countries to construction of Trans Caspian
pipeline, the US diplomat has stated that it is up to countries in
the region.
“Countries decide what they should do through negotiations. We
believe that if Caspian countries decide to have common pipeline,
they may do it.”
Touching Nagorno Karabakh conflict between Armenia and Azerbaijan,
Mr. Bryza expressed he was opposing talks to be delayed for next year.
“Political situation in Armenia is going to be complicated next year.
Robert Kocharyan and Ilham Aliyev have done great at the table of
negotiations” he said.
URL:

OSKANYAN: “AZERBAIJANI AND ARMENIAN PRESIDENTS FAIL TO REACH AGREEMENT IN BUCHAREST”
Today, Azerbaijan
June 7 2006
“No progress was made at the meeting between Presidents of Azerbaijan
and Armenia, Ilham Aliyev and Robert Kocharian in Bucharest,” Armenian
Foreign Minister Vardan Oskanian stated.
In his words, matters over which Armenian and Azerbaijani Presidents
failed to reach consensus in Rambouillet, were not agreed upon in
Bucharest either.
“Despite the new formula and approaches OSCE Minsk Group co-chairs
proposed, they failed to reach agreement,” Oskanyan said. At that
he noted that the Kocharian-Aliyev meeting was held in a normal
atmosphere.
“Nevertheless the FMs of the two countries are commissioned to
continue talks over settlement of the Nagorno Karabakh conflict and
try to find common points before the next meeting of the presidents,”
Oskanyan added, according to APA.
URL:

REPORT DETAILS MIXED HUMAN TRAFFICKING PICTURE IN EUROPE, EURASIA
By Jeffrey Thomas
Washington File Staff Writer
Washington File, DC
June 7 2006
Improvements Noted In Switzerland, Greece, Slovak Republic, Ukraine
Washington — The campaign to stop to what Secretary of State
Condoleezza Rice has called a “modern day form of slavery” is achieving
mixed results in Europe and Eurasia, according to the Trafficking in
Persons Report released by the U.S. State Department June 5.
Several countries improved their efforts and achieved higher rankings
in the congressionally mandated report, which places nations in one of
four categories based on their efforts to control human trafficking,
prosecute those involved and support and assist victims of these
crimes. But just as many countries were downgraded for their lack of
effort, and the State Department continues to estimate that roughly
800,000 people are trafficked each year.
Even though the number of convictions in Europe and Eurasia for
trafficking increased over the previous year, the report criticized a
number of countries for undercutting those convictions with weak or
suspended penalties, and the number of prosecutions for trafficking
fell substantially.
The report recognized Switzerland’s new legislation and greater
commitment to combat trafficking by raising it from Tier 2 to Tier 1.
Seventeen European countries now meet the Tier 1 standards established
in the U.S. Trafficking Victims Protection Act of 2000.
The report cites as praiseworthy the actions of three European and
Eurasian countries in its section on International Best Practices:
Bosnia-Herzegovina, Tajikistan and Romania. Bosnia is cited for
major raids made by its Anti-Trafficking Strike Force, which rescued
26 victims and apprehended at least 14 traffickers. Tajikistan is
commended for setting up elite anti-trafficking units in regions
throughout the country, which led to a significant increase in
trafficking investigations in 2005. Romania is cited for cooperating
with private researchers on the most comprehensive report on human
trafficking in Romania to date.
Greece, the Slovak Republic and Ukraine improved from the Tier 2
Watch List classification to Tier 2, which comprises countries that
are demonstrating commitment to address their trafficking problems
but have not yet achieved international standards. The Tier 2 Watch
List includes countries that show signs of falling backwards.
Among the positive developments in Greece cited by the report were
increased capacity to protect and assist victims, improved cooperation
with NGOs, the signing of a child repatriation agreement with Albania
and a national public awareness campaign.
In the Slovak Republic, the government has a national working group on
trafficking and an increased network for victim services, and it has
adopted its first national action plan on trafficking, the report said.
Ukraine improved by increasing its law enforcement capacity and
strengthening its anti-trafficking criminal code, the report said.
Tier 3 comprises countries whose governments are not making significant
efforts to meet international standards. Uzbekistan fell from the
Tier 2 Watch List to the Tier 3 category in the 2006 assessment —
the only country in Europe and Eurasia to be ranked so low. The report
said Uzbekistan failed to fulfill any of its commitments to adopt
comprehensive anti-trafficking legislation, to raise trafficking
penalties, to support its first trafficking shelter and to approve
a national action plan.
Cyprus fell from Tier 2 to Tier 2 Watch List because of its failure to
show evidence of increasing effort to solve its serious sex trafficking
problem, according to the report.
Both the Czech Republic and Portugal, which in 2005 were rated Tier
1 countries, have been dropped to Tier 2. In the Czech Republic,
there were “inadequate sentences for traffickers,” the report said,
and it also cited concerns over forced labor. Portugal “failed to
prescribe punishment sufficiently stringent to deter trafficking”
and “virtually all convictions for trafficking resulted in suspended
sentences in 2004,” the report said.
The report keeps Armenia on the Tier 2 Watch List for a second
consecutive year because of its “failure to show evidence of increasing
efforts over the past year, particularly in the areas of enforcement,
trafficking-related corruption, and victim protection.”
Russia is on the Tier 2 Watch List for a third consecutive year
because of its failure to “show evidence of increasing efforts to
combat trafficking, particularly in the area of victim protection
and assistance,” the report said.
Russia remains a significant source of women trafficked to more than
50 countries for commercial sexual exploitation, according to the
report; Russia is also a transit and destination country for men and
women trafficked from Central Asia, Eastern Europe and North Korea.
The report also expressed concern over forced labor in the maritime
industry, the trafficking of women from rural areas to urban centers
within Russia for commercial sexual exploitation and the trafficking
of men internally and from Central Asia for forced labor in the
construction and agricultural industries.
The report said Russia is making “significant efforts” to comply with
the minimum standards for the elimination of trafficking but made
“uneven progress” during the period covered by the report, April 2005
through March 2006. It urged Russia to work with NGOs to establish
more shelters for victims of trafficking and to pass and implement
comprehensive legislation on victim assistance.
WORLD CUP ISSUES
Tier 1 status does not mean a country has solved its trafficking
problems. Germany, for example, while ranked in Tier 1 because it
“fully complies with the minimum standards for the elimination of
trafficking,” is a source, transit and destination country for men,
women and children trafficked for the purposes of sexual and labor
exploitation. Many of the victims come from Central and Eastern Europe,
including Russia, the report said.
The report noted concerns among some nongovernmental organizations
and governments over the potential for increased human trafficking in
Germany during the World Cup Soccer championship, which opens June 9.
The Parliamentary Assembly of the Council of Europe (PACE), for
example, expressed concern April 12 that between 30,000 and 60,000
women might be trafficked for sexual exploitation during the World Cup.
German federal and state governments say they have taken steps
to prevent trafficking during the championship by improving
victim-screening mechanisms and police safeguards, sponsoring seminars,
expanding print and video outreach and strengthening interagency
coordination, according to the report.
“Nevertheless, due to the sheer size of the event, the potential for
increased human trafficking surrounding the games remains a concern,”
said the report. Germany expects more than 3 million fans to attend
the matches in 12 cities across the country between June 9 and July 9.
“Germany should continue to focus attention on domestic
demand-reduction efforts, implement the 2005 penal code amendments, and
consider releasing more detailed statistics that include the full range
of charges — including non-trafficking charges — that traffickers are
prosecuted for and the sentences they receive,” the report recommended.
The transcript of Rice’s remarks is available on the State Department
Web site, as is the full text of the report.

‘YOU’VE GOT MAIL,’ SAYS BUNNY NABAZTAG
OhmyNews International, South Korea
June 7 2006
French wi-fi rabbit debuts in the United States
Claire Ulrich (briconcela)
Nabaztag, the wi-fi rabbit
©2006 Violet Company
A CNN tech report, an article in the New York Times, top tech blogs
like Engadget all gush about Nabaztag, a cute plastic rabbit with
wifi-superpowers that makes it the first known wifi-toy on this
planet. To French technophiles, this is old news. Nabaztag was born
in Paris in mid-2005.
50,000 rabbits have been sold since in Europe, where an on-line
cult is developing around the tech-pet. Sold on line or at high-end
retailers for the not cheap price of US$150, it now tackles the North
American market.
What does this 9-inch bunny do, exactly? Nothing robotic. Everything
wi-fi. With a Nabaztag at home, you don’t have to stay glued to
your desktop to stay tuned. Your rabbit will flash colored signals,
tweak its ears, sing, talk, to keep you informed of what goes on in
your online life while you are busy in the kitchen or watching TV in
the lounge.
Given a power outlet and a wifi connection, it warns you of incoming
mail, activity in your RSS reader, briefs you on stocks price, air
quality, weather,trafic conditions in your town (or on the other side
of the world). What else? Wake-up calls, text-to-voice SMS and mails,
domotic alerts (red cheeks? you forgot to close the garage door! ).
And a few fun options, such as Tai-Chi classes for your rabbit, or
marrying two bunnies to synchronise their tasks and ear-positions
through rabbit-to-rabbit communication. Some services are free of
charge, others require a paying subscription.
Nabaztag has a story. It was created by Rafi Haladjian, a French
Net entrepreneur. Why a rabbit? “Because, by pure chance, there
was a toy-rabbit sitting on my desk when we brainstormed about a
non-intrusive object that didn’t need a screen to provide information
in the home.” Why name it Nabaztag? “Because it’s the word for rabbit
in Armenia, my parents’ country.”
Nabaztag is not Mr Haladjan’s first venture. In 1993, he founded
FranceNet, the first French Internet provider, then Fluxus (sold
to British Telecom), and now manages Ozone, an Internet thought
wi-fi network, as well as the Violet company, a design studio of
“smart objects.”
Nabaztag is Violet’s first release. A test run of 5,000 Nabaztags
sold out within a few days in France in July 2005. The company main
challenge nowadays is to keep ahead of the demand, while working on
brothers and sisters for Nabaztag, a whole family of smart objects.
In France, Mr Haladjian is considered an expert on the future of the
Internet. He believes in the dawn of “Pervasive network,” a concept
he frequently lectures about at universities and French think tanks.
He forecasts that Internet connection, thanks to wifi technology, will
soon become as natural and expected as electric power or running water
in homes. At least, in industrialized countries. Screens, desktops,
UC towers will then be cumbersome things of the past.
Borders between the physical and digital worlds will slowly be
erased. Smart objects in your home and life will link directly to a
wifi flow of orders and information. Mr Haladjan intends to make those
not only intelligent but beautiful, poetic, soothing and, above all,
not intrusive.
Right now, cuteness is obviously Nabaztag’s main asset. But will the
tech-bunny become a mainstream household feature? A survey on the
Nabaztag French blog profiles users and their motives for adopting
a wi-fi rabbit. One French fan uses it daily to check on weather and
traffic conditions in Athens (Greece) where her boyfriend lives.
Another writes candidly about what hooked her to her tech-pet:
“Nabaztag makes me feel superior. I am the only one who understands
what my rabbit is telling me.”
Photo:
Rafi Haladjian takes a break in a Paris cafe: the creator of Nabaztag
is at work on a new breed of smart objects for the Internet age ©2006
Claire Ulrich
ticle_view.asp?article_class=4&no=296953&r el_no=1
–Boundary_(ID_YRGFwsv+wx8Z0rsfHqXkkA)–

BLAIR HOPES FOR GARABAGH SOLUTION IN 2006
Assa-Irada, Azerbaijan
June 7 2006
Baku, June 6, AssA-Irada
British Prime Minister Tony Blair has expressed hope for a resolution
of the long-standing Armenia-Azerbaijan conflict over Upper (Nagorno)
Garabagh this year.
“I hope that 2006 will see a solution to the conflict that has claimed
many lives,” he wrote in a congratulatory message to President Ilham
Aliyev on the occasion of the opening of the 13th International
Caspian Oil And Gas Exhibition in Baku on Tuesday.
Blair wrote that oil revenues will open up extensive opportunities
for Azerbaijan, which necessitates reconsidering future prospects
and outlining programs for the coming years. He indicated that the
country would continue taking steps to expand its ties with NATO,
the Council of Europe and OSCE to promote free society and economy.

US OFFICIAL SAYS 2006 CRUCIAL FOR GARABAGH SETTLEMENT
Assa-Irada, Azerbaijan
June 7 2006
Baku, June 6, AssA-Irada
A US official has said that a promising option to settle the
long-standing Armenia-Azerbaijan Upper (Nagorno) Garabagh conflict is
currently on the negotiating table and an agreement may be reached now.
Commenting on Sunday’s round of talks between Azerbaijani and Armenian
Presidents in Bucharest, the US Deputy Assistant Secretary of State
Matthew Bryza said the fact it yielded no fruit should not create
hopelessness. The United States is confident that peace talks will
continue and the desired results will be achieved.
“Courage is required from Presidents Ilham Aliyev and Robert
Kocharian. At a time of ongoing negotiations, the presidents are
likely to face daunting tasks,” said Bryza. He said the sides should
act swiftly to achieve a solution on Garabagh soon, as the elections
to be held in the future may delay the process.
“2006 is a crucial year for the conflict resolution and we believe a
solution will be reached, as political developments in Armenia will
be more complex next year,” the American official added.

MINISTER SEES NEED FOR FURTHER GARABAGH DEBATE
Assa-Irada, Azerbaijan
June 7 2006
Baku, June 6, AssA-Irada
The latest meeting between the Azerbaijani and Armenian presidents
to discuss settlement of the long-standing Upper (Nagorno) Garabagh
conflict lasted five hours. Discussions were held both between the
presidents and at the level of OSCE Minsk Group co-chairs mediating
the peace process.
“It’s premature to talk of any advancement in the negotiations,”
Foreign Minister Elmar Mammadyarov has said while commenting on the
latest round of Aliyev-Kocharian talks.
He said the presidents had reaffirmed their positions on a number of
issues. “By and large, it is necessary to collate the positions of
both sides. The presidents’ meeting has been completed, while the
co-chairs are still in Bucharest and are preparing a statement on
the meeting outcomes,” Mammadyarov said.
The minister added that consultations should be continued on issues
the parties still diverge on. Therefore, the foreign ministers may
still meet if need be. He did not rule out that the two leaders may
hold talks before the end of this year. Mammadyarov said every meeting
was important, noting that discussions were currently focusing on eight
to 10 issues, while a number of other matters had already been agreed.

AZERI, ARMENIAN LEADERS TO TABLE GARABAGH AGAIN THIS YEAR: OFFICIALS
Assa-Irada, Azerbaijan
June 7 2006
Baku, June 6, AssA-Irada
Another meeting of Azeri and Armenian presidents Ilham Aliyev and
Robert Kocharian to discuss settlement of the long-standing Upper
(Nagorno) Garabagh conflict is scheduled for this year, the head of
the President’s Office international relations department, Novruz
Mammadov, has told journalists.
Mammadov said no information was provided on the latest meeting of
the two leaders in Bucharest, Romania because this would inappropriate
at the current stage in the negotiations.
“The presidents’ meeting on Monday lasted an hour and half. It was then
decided to continue it on the next day. This means work is underway
on certain issues. The talks are challenging and it is difficult to
reach agreement, as Armenia’s position is unacceptable.
They want Upper Garabagh to be granted independence.
“We can say before the international community that it is ridiculous
to grant independence to any area settled by Armenians,” Mammadov said
referring to Kocharian’s speech. He added that the Armenian leader’s
position has not changed.
Mammadov said President Aliyev dismissed the stance of his Armenian
counterpart by saying that this is impossible and the dispute could
be resolved strictly within Azerbaijan’s territorial integrity. As
for the Armenians’ demand “to determine their own fate”, they had
done so with the establishment of the Armenian state, he said.
The presidential administration official said it is hard to say at
this point whether the sides have agreed any specific issues. “The
agreements reached on certain details should be put together and the
final principles coordinated.”
Mammadov added that despite all this, the presidents’ meeting in
Bucharest is a step forward.

RATING ASSIGNED TO ARMENIA CAN BE CONSIDERED QUITE GOOD: INTERVIEW WITH CB CHAIRMAN
ARKA News Agency, Armenia
June 7 2006
Exclusive interview given to the ARKA News Agency by Chairman of the
Central Bank of Armenia Tigran Sargsyan.
ARKA: Mr. Sargsyan, would You comment on Armenia’s getting the
credit rating?
T. Sargsyan: Armenia will appear on the world’s financial map as
early as now, and all the potential and real market participants, as
well as investors, will see Armenia on this map with its sovereign
rating. This will help everybody form the idea of the economic and
political situation and on the country’s credit worthiness. Besides,
this also means that in the future we must implement all our
national and investment projects to make the country more attractive
to investors. On the other hand, it is a unique chance to get an
impartial estimation of the real situation in our economic, political
and social life.
ARKA: What do You think, does the “BB-” rating assigned to Armenia
reflect the real situation in Armenia’s economy, its political risks?
T. Sargsyan: The Fitch Company is a rather well-known company – it is
among the three best known companies along with Moody’s and Standard
Poor’s, and we cannot ignore their authoritative opinions. We just
should consider the parameters, the strong and weak points reflected
in the report for the Armenian authorities’ further actions to be
aimed at gradual rise in the rating. Of course, we would like to get
a rating much higher than “BB-“. Any country seeks a better rating
and a more favorable situation on the financial map of the world and
for investors.
ARKA: What are the current ratings of our closest neighbors in
the region?
T.Sargsyan: Georgia’s rating is one mark lower than Armenia’s,
and Azerbaijan’s is one mark higher. However, there are a number of
peculiarities. First, ratings agencies seem to initially display a
more conservative approach to estimations, which is quite reasonable.
Azerbaijan started from a much lower rating that we did. So, since we
are just starting this process, it is quite a good start compared with
Azerbaijan. Besides, we think that we have a sufficient potential for
further gradual rise of Armenia’s rating. In general, Armenia is at
the same level with Turkey and Brazil, and the “BB-” rating assigned
to our country can be considered quite good for a start.
ARKA: When can the rating be revised?
T. Sargsyan: This is continuous monitoring, which will be conducted in
future as well. If any radical changes occur in our life, estimation
parameters serious change, that is, serious progress takes place,
the rating will mechanically be raised or lowered.
ARKA: What is the benefit of Armenia’s banking system from the country
rating? What opportunities and prospects open up?
T. Sargsyan: First, with the country rating available, commercial
banks can directly get their own ratings by means of rating agencies,
which is of high importance for us. In turn, rating agencies themselves
will find it much easier to work with commercial banks and enterprises
wishing to get ratings. As regards investors, they will be enabled to
really estimate the ratings of the country and of Armenian companies,
including commercial banks, and form a real idea of the state of
affairs not only in the country, but also in particular banks, which
can become their potential partners.
ARKA: Rating also implies the possibility of issuing bonds. How
promising is this for Armenia?
T. Sargsyan: This issue has been discussed by RA Premier-headed Supreme
Economic Council. Later, Armenia will enter the international financial
markets with its securities. However, it is inadvisable during the
next two years, because out medium-term financial program does not
yet envisage such measures. That is, we do not yet have to attract
funds for the country’s needs.
In future, depending on the progress of our reforms, particularly on
the progress of our programs with the WB and IMF, and if the rates
of economic growth are as high as now in two years, this task, I
think, will be a topical one – not only for attracting funds for the
Government’s needs, but, first of all, for demonstrating Armenia’s
solvency and credit worthiness and for confirming its rating. And
this attitude to the foreign debt may in principle contribute to the
rise of our rating.
ARKA: What are Your comments on the situation on Armenia’s foreign
exchange market? Will the dram revaluation continue or is it a
temporary process?
T. Sargsyan: One of the weak points, which is indicated by the Fitch
Company in estimating our rating, is a high dollarization level in
Armenia. In turn, this means that we have serious chances to get
our country rating raised. The only thing required is to reduce the
dollarization level, which means that we must change our people’s
way of thinking and attitude to the national currency.
For most of us the national currency must be not only the principal
means of payment, but also a means of saving. Our major problem is
smooth dedollarization during the next 2-3 years. Armenia’s citizens
must give priority to the national currency. Exchange rate fluctuations
will be less appreciable, and the population will be less sensitive
to them.
If get the population’s main incomes and expenses to be in the national
currency, and the national currency’s purchasing power to be estimated
in conformity with the price rise, we can then speak of rather serious
progress. And that will inevitable reflect on out country rating.
ARKA: What is Your estimate of Armenia’s macroeconomic indices over
the last five months?
T. Sargsyan: Early this year we had some fears of the accumulated
inflation potential. The CBA aimed at toughening the monetary policy.
I think that these measures, along with the RA Government’s decision
on gradual rise in gas prices, proved rather effective, as they
considerably reduced the accumulated potential. Now we are within the
planned indices. The inflation level is under control as well. The
rates of economic growth inspire optimism. We think that the results
of the first five months will allow us to forecast that we will be
able to close the year with inflation within 3% and two-digit GDP
growth.