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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 2,797 2,367 2,100 139
         
GNI per capita
 US $ 950 790 570 143
Ranking is given out of 208 nations - (data from the World Bank)

Books on Armenia


Update No: 312 - (03/01/07)

Armenia is seen by its neighbours as an anomaly, much as is Israel by its own. Iranian President Ahmadinejad has said that Israelis should be relocated in Alaska. Azeris and Turks with a kindlier intention could wish for Armenians to be relocated in California. It already hosts more Armenians in the Diaspora there than there are in Yerevan.
Actually, Big Daddy is not the US, but Russia, without whom Armenia's very existence would be in doubt. The Armenians are the main allies of Moscow in the troubled Caucasus. The whole region is replete with the ramifications of a complex history.

Armenia plans to occupy Abkhazia? Georgian intelligentsia accuses Armenians of genocide of Georgians
The following item amply testifies to this. APA news agency (Baku) reports that 60 representatives of the Georgian intelligentsia have demanded that Georgian President Mikhail Saakashvili recognize the genocide committed by Armenians in Georgia. 
They say that in 1993, the "Bagramyan" military unit, together with Abkhazians, fought against the Georgian army and killed Georgians living in Abkhazia: "Before the Czar, Russia populated Georgian Javakheti with Armenians, there had been no single Armenian in that region. However, today Javakheti is mentioned as part of Armenia. Having 'crippled' the Georgian monuments in the territory of Javakheti, the Armenians are not trying to convince everybody that they are Armenian. All this is being done systematically, and so, must be recognized as a genocide against the Georgian nation."
Member of the Supreme Council of Abkhazia in exile Akaky Gasviani supports this initiative and points out that the Armenians have a big role in the "occupation" of Georgian lands and the establishment of the separatist regime in Abkhazia.
The Golos Armenii daily publishes the abridged version of the article "What Is Armenia Plotting Against Georgia," published in the Aisi daily (Georgia) (Oct 3-9 2006). Golos Armenii says that the article tells how Armenians populated Abkhazia and Ajaria and what the atrocities the "Bagramyan" battalion committed during the war against the Georgians. "Journalist Gogneli quotes "some expert on Armenian problems" as saying: "If anybody thinks that the Russians will appropriate Abkhazia, he is mistaken. Should they - God forbid - recognize Abkhazia as an independent, the Armenians will occupy this region in just one year. Today, they are silent and are just waiting for a good opportunity. But as soon as it happens, they will rise and appropriate this Georgian region. Today, they are trying to occupy Abkhazia's sea coast - they are actively working in this direction. Then, they will 'take care of' Javakheti" and, finally, they will get access to the sea. This is a part of their "Great Armenia" plan. So, we, the Georgians, must be vigilant and wise. I wonder if our leadership is thinking about it?"
The Azg daily says that, neither in the Georgian mass media nor via its own sources in Georgia, has it managed to find anything that could prove the information of the Georgian daily. Asked by Azg to comment on the statement, Ambassador of Georgia to Armenia Revaz Gachechiladze said that he knows nothing about such a statement and, even if it was made, he, first of all, wants to know the names of its authors. "In any case, this is not the position of the Georgian Government."

Caucasus: Azeri, Armenian, Karabakh officials assess talks
Over the past 12 months, the three co-chairmen of the OSCE Minsk Group that seeks to mediate a solution to the Karabakh conflict have warned repeatedly that upcoming elections in Armenia and Azerbaijan could scupper chances of reaching a peace settlement. 
Armenia is due to hold parliamentary elections in 2007. Both Armenia and Azerbaijan will hold presidential elections in 2008. 
In the run-up to those ballots, the co-chairs reason, the two countries' leaders will be reluctant to agree on the serious mutual compromises that a settlement will inevitably necessitate. Consequently, a sense of urgency has imbued successive meetings this year between either the Armenian and Azerbaijani foreign ministers or the two countries' presidents. 
The meeting in Minsk on November 28 between Armenian President Robert Kocharian and his Azerbaijani counterpart Ilham Aliyev was thus widely perceived as the last chance for some time to reach even a preliminary agreement. But nothing new emerged from the meeting, which was at least conducted politely. As the former president of Nagorno-Karabakh, Kocharian is a hawk on the issue. Ironically, Aliyev hails from another enclave, Nakichevan. He understands the bunker mentality of enclavists well.

EU-Armenia Action Plan New Guide for Reform in Armenia 
The last 15 years were a period of state building in Armenia, Armenian President Robert Kocharian said on November 17th, when addressing the Bertelsmann Fund in Berlin, reported the RA leader's press office. 
In his speech Kocharian specifically said, "Our accession to the Council of Europe 5 years ago determined the structure of legislative reforms and creation of institutes. WTO membership resulted in speeding up and increasing motivation for transfer to liberal economy. Thinking of continuation of reforms we consider the European Neighbourhood Policy as a new milestone. In our understanding the Action Plan lately signed in Brussels is a new guide in reforms. 
Armenia works to develop effective cooperation with the European Commission and strengthen bilateral ties with EU member states. This will result in intensive political dialogue, growth of trade, activation of social and public interaction. It will enhance the level of mutual security. We count on the support of Germany and cooperation within these new frames," he said.
For years Armenia consistently pursued a foreign policy, based on the concept of using the advantages of coincidence of interests, not exploiting the differences in the region. This allowed us to combine excellent relations with Russia, EU, US and Iran. This is also an important part of transformation of our country and society. While living in the USSR for decades, we were taught to see the world in black and white, consisting of friends and enemies

Kocharian: 'Reforms' Most Frequently Used Word when Describing Processes in Armenia 
When describing the processes occurring in Armenia since the independence the word 'reforms' - economic, social or political - becomes the most frequently used one, Kocharian said. "There is no field of life that has not been subjected to serious reformation after the decline of the USSR and Armenia's transition to democracy and market economy. We have reconstructed our institutes, reconsidered our policy and the changed the structure of economy. This all was new and promising. Unfortunately this process was complicated by the war, blockade, which has not been lifted so far, and a severe energy crisis. We responded with speeding up the rate of transformation, mobilization of resources and raising the efficiency of administration. 
"Armenia is not rich in natural resources but it's remarkable for the most important of them- the human resource. It first of all is manifested in the universally recognized features of our people - enterprise and diligence. Our characteristic is the high level of people's interest in the organization of any kind of business. In order to use these advantages we should create a favourable atmosphere for businessmen and ensure the protection of investments. This implies liberalization of economy and minimization of state interference in business. 
"As result we fix serious intentions to change the structure of economy. 85 per cent of the Gross Domestic Product is produced by the private sector 40 per cent of which consists of small and middle business. We are proud of this figure. The middle class is in the process of formation and it has a serious impact on the public perception of the future.
"Certainly, everything is not so smooth. We badly need to perfect the tax and customs administration. Struggle against corruption should be strengthened at all the levels in compliance with the action plan adopted by the government. 
"We also have to develop the sector of financial services in Armenia. We possess good potential in the form of an efficient banking system which is constantly being modernized. Although we watch the growth of direct foreign investments we know that there is still much to do in future. I would like to express our sincere gratitude for technical assistance to Germany. The programme of technical assistance and financial cooperation which is being implemented jointly with the KFW and GTZ makes a considerable contribution," the President said."

THE PARANOIA OF ARMENIAN POLITICS
by Richard Giragosian

Much of the recent political developments in Armenia have been dominated by two main themes -- the ongoing mediation of the unresolved Nagorno-Karabakh and the approaching electoral cycle. Neither of these two themes represents anything new for Armenian politics.
The Nagorno-Karabakh conflict remains locked in a seemingly endless series of talks and meetings between Armenian and Azerbaijani officials, fuelled by an occasional outburst of enthusiasm, only to be followed by yet another diplomatic setback or lost opportunity. And just as predictably, a series of tactical manoeuvres, most often obscured by the opaque and murky nature of Armenian politics, routinely define the months leading up to elections in Armenia.
From a broader perspective, and for much of the past 15 years of Armenia's independence, politics have been largely confined to an ever-narrowing set of issues, with little debate and even more limited discourse. Within the increasingly restricted political parameters, democratisation has become disabled. This too is nothing new for Armenia.
Yet there has been an interesting shift in Armenian politics in recent weeks, marked by a convergence between the politics of Armenian nationalism and the paranoia of Armenian politicians. 
This shift first emerged with the arrest and subsequent deportation of a prominent veteran of the Karabakh war. The authorities charged Lebanese-born Zhirair Sefilian, and his associate Vartan Malkasian, with plotting the violent overthrow of the Armenian leadership (see "RFE/RL Newsline," December 11 and 12, 2006). The incident sparked immediate suspicion and apprehension, with some charging a conspiracy, linking the arrest to rumours of a possible breakthrough peace deal with Azerbaijan over Nagorno-Karabakh. 
According to this line of reasoning, the motivation for the arrest was driven by the politics of nationalism, compounded by the paranoia of politicians. But this presupposes one essential, and specific, variable -- a looming peace deal. Only in such a case could the arrest be seen as a pre-emptive move to deflect dissent and overcome opposition. The key question, however, remains: is there really such a pending deal on Nagorno-Karabakh? 
The more realistic understanding of the arrest lies in a broader context. It is the broader perspective that reveals a more general paranoia of politicians, unrelated to any sense of nationalist politics. In this way, the arrest and deportation of Sefilian was actually preceded by a similar incident, only weeks before. 
In early December, the Armenian authorities deported an ethnic Armenian activist from the predominantly Armenian-populated southern Georgian region of Djavakheti to Georgia. The activist, Vahagn Chakhalian, a leader of the United Djavakhk organization campaigning for regional autonomy, was first arrested in October, just hours after he, his parents, brother, and fellow activist Gurgen Shirinian were reportedly stopped and attacked as they arrived in Yerevan (see "RFE/RL Newsline," October 20 and December 5, 2006).
The linkage between the arrests and later deportations of both men is based on more than tactics or techniques, however. Both cases demonstrate that it is the paranoia of the political elite that is driving the most recent political developments in Armenia. Both men posed a threat, not in terms of the politics of nationalism, but more as a perceived threat to paranoid politicians.
Yet what is most ironic is the pronounced and misplaced paranoia among the political elite. The real threat to their power comes not from anything that these people could or would do prior to elections. The real threat stems from the elections themselves, as the political elite still seems unable to realize that the May 2007 and 2008 elections are the true challenges, to them and to the country. And until the ruling elite recognizes the necessity for improved elections, arrests and deportations will do little to ensure stability and security in Armenia.

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ECONOMY

Armenia's Central Bank expects inflation at 5.5% to 6% 


The Central Bank of Armenia is forecasting inflation at 5.5 to six per cent in 2006, Central Bank Chairman, Tigran Sarkisian, said on November 21st, Interfax News Agency reported. 
Consumer price growth will slow over the next two years, he said. The Central Bank is expecting inflation of four per cent in 2007, although it could fluctuate 1.5 per cent in both direction, and around three per cent in 2008. The largest potential for inflation was accumulated in 2005 as a result of a sharp increase in prices for fuel, granulated sugar and grain, Sarkisian said. Inflation of around seven to 10 per cent a year is acceptable for such an actively developing country like Armenia, Levon Barkhudarian, ex-finance minister and CEO of Armimpexbank, said. The Armenian government increased its inflation forecast to five per cent for 2006 from the three per cent that was put in the budget earlier. Inflation was adjusted because of the country's high growth rate this year. Armenia had deflation of 0.2 per cent in 2005.

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FOREIGN INVESTMENT

Foreign investment in Armenian economy soars 57% in Q1 

Foreign investment in the Armenian economy in January-September 2006 increased 31.8 per cent year-on-year to 297.4 million Euro, a source in the republic's National Statistics Service said, Interfax news Agency reported. 
Foreign direct investment in the reporting period amounted to 149 million Euro, up eight per cent year-on-year. The communications sector received 23.7 per cent of total foreign direct investment, the mining industry - 23.4 per cent, air transport - 16.4 per cent, metallurgy - 7.7 per cent, and the food industry (including drinks) - 6.9 per cent. 
The leader in terms of foreign investment in the Armenian economy in January-September this year was Argentina, which increased its investment 9.1-fold to 57.9 million Euro, including 29.4 million Euro in direct investment. 
Lebanon invested 56.3 million Euro (up 110 per cent), and Greece - 44.9 million Euro (down 34.1 per cent). Direct investment from Germany increased 18.7 per cent to 34.6 million Euro. Investment from Russia in the reporting period amounted to 34.4 million Euro (down 5 per cent), including 1.6 million Euro in direct investment (down 55.8 per cent).
Armenian GDP grew 13.1 per cent year-on-year to 2.033 trillion dram in January-October 2006, a source in the National Statistics Service said, Interfax reported. 
Construction output grew 38.8 per cent to 459 billion dram in the 10-month period. Retail trade increased 10.3 per cent to 607.5 billion dram. Gross agricultural output rose 0.1 per cent to 465.5 billion dram and freight turnover was up 0.1 per cent to 1.808 billion kilometre-tonnes. Industrial output fell 0.9 per cent to 524 billion dram and electricity generation dropped 5.7 per cent to 4.886 billion kilowatt-hours. Foreign trade turnover increased 14.3 per cent to 1.07 billion dram in the first 10 months of 2006. Armenia's Finance and Economy Ministry forecasts that GDP will grow 11-12 per cent in 2006, compared to a budget target of 7.5 per cent. GDP grew 13.9 per cent in 2005.

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MINERALS & METALS

Zangezur to post output of 210m Euro in 2006 

Armenia's Zangezur Copper-Molybdenum Plant will have output of 80 billion dram or 210 million Euro this year, an Armenian Trade and Economic Development Ministry official said, Interfax News Agency reported. 
Investment in the plant's modernisation since it was privatised in 2004 amount to 78.5 million Euro, Artur Ashugian, the ministry's official in charge of natural resources and the mining sector, was cited as saying. Scheduled investments for the period 2005-2008 are 157 million Euro. The plant has fully modernised its concentrating plant in order to process more ore, Ashugian said. He said the plant mined and processed 8.1-8.2 million tonnes of ore in 2004, but that volumes would rise to 10-10.2 million tonnes in 2006 and 12.5 million tonnes in 2008. The higher ore extraction should raise output at the Pure Iron works and Armenian Molybdenum Production, which also process the Zangezur ore. 

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TELECOMMUNICATIONS

Vimpelcom to invest 100m in telecoms market in 2007 

VimpelCom, which has acquired a 90 per cent stake in Armentel, a cellular operator in Armenia, is prepared to invest some 100 million Euro in the development of the Armenian telecommunications market in 2007, VimpelCom representative Oleg Bliznyuk said in Yerevan on November 14th, Interfax News Agency reported 
VimpelCom will spend the funds on the development of both fixed-line and mobile communications, he said. Armentel's budget is currently being approved and will be passed after the completion of a buy-sell transaction for the 90 per cent stake, which is being bought from Greece's Hellenic Telecommunications Organisation (OTE). VimpelCom's investment projects will be presented in more detail after the deal is completed, he said.

 

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