ARMENIA THIS WEEK

Monday, January 24, 2005

In this issue:

Armenian government posts economic scorecard for 2004

Governing coalition, opposition in talks over constitution reform

ARMENIA POSTS STRONG ECONOMIC GAINS FOR 2004

Armenia’s main economic index, the Gross Domestic Product (GDP),
increased by over 10 percent last year, the preliminary data of the
National Statistics Service showed, a fourth consecutive year of
double-digit growth. Armenia registered overall economic progress
despite a shortfall in diamond-cutting, a major industry, and conclusion
of the multi-million-dollar infrastructure projects funded by the
U.S.-based Lincy Foundation. The overall GDP now totals over $3.5
billion, which is roughly where it stood prior to the economic collapse
of the early 1990s.

Construction, agriculture and electricity generation posted the
strongest figures of all economic sectors, growing by 17, 15 and 10
percent year-on-year, respectively. Overall industrial output increased
by two percent, reflecting decline in diamond-cutting and stoppages at
major industrial enterprises. Exports increased by four percent to $715
million. Twenty-five European Union countries accounted for 36.5 percent
of Armenia’s external trade, with Russia’s share decreasing to 12.5
percent. Armenia’s trade with Georgia grew by 50 percent, the highest
such increase with any one country, following the anti-corruption
crackdown by the new administration of President Mikhail Saakashvili.

The Statistics Service also reported a 23 percent increase in average
incomes, now standing at just over $100 in the private sector and about
half that in the smaller public sector, and registered unemployment
falling from 9.7 to 9.3 percent of the labor force. The unemployment
figures have been disputed by a recent poll held by the
Armenian-European Policy and Legal Advice Center (AEPLAC) which found
that more than 20 percent of respondents “could not find a job.” At the
same time, Armenia’s Labor Minister Aghvan Vartanian recently suggested
that at least 130,000 Armenians were employed unofficially, with their
employers seeking to avoid tax and social security payments. President
Robert Kocharian has recently pledged to crack down on this practice.
(Sources: Armenia This Week 11-8; Arminfo 1-20; RFE/RL Armenia Report
1-20, 21)

COALITION MAJORITY, OPPOSITION TO DISCUSS CONSTITUTIONAL REFORM

Armenia’s main opposition groups last week submitted a set of proposals
for reforming the Armenian Constitution, which the coalition majority
leaders said would be seriously considered. Proposals submitted on
behalf of the opposition Justice Bloc and National Unity Party mark a
turnaround in their refusal to cooperate with the governing coalition
following the end of opposition-led street protests last June. Armenia’s
President Robert Kocharian has long pledged to reform the 1995 Armenian
Constitution, seen as giving too many powers to the President, but a
government-backed referendum held in May 2003 failed to garner
sufficient votes.

According to media reports, the opposition reform package would
strengthen parliamentary oversight of the government, limit the
president’s authority to appoint and dismiss judges and make the Yerevan
mayor an elected official. The joint opposition proposal is the fourth
such reform package. Last year, the coalition majority comprising the
Republican and Country of Law Parties and the Armenian Revolutionary
Federation (Dashnaktsutiun), the United Labor Party led by businessman
Gurgen Arsenian and a member of the Justice Bloc Arshak Sadoyan had
submitted their respective proposals.

The Council of Europe’s Venice Commission, which has long worked with
Armenia on constitutional reform, last month published an “interim
opinion” concluding that the coalition and Arsenian proposals represent
an overall improvement over the Constitution in force, but would need
further work to fully correspond to European standards of power-sharing
and human rights. Sadoyan’s proposal was criticized as containing
“provisions that cannot be realistically implemented in practice.” The
Parliament is now expected to work out a compromise constitutional
reform draft to be voted on a popular referendum, possibly later this
year.

Also in recent weeks, Nagorno Karabakh President Arkady Ghoukasian
reshuffled his cabinet, dismissing the education minister, a senior
member of the local branch of Dashnaktsutiun. The move led to a falling
out with the party, which backed Ghoukasian’s re-election bid in 2002.
Last August, a Dashnak-backed parliamentarian defeated a pro-government
candidate in elections for Stepanakert mayor. Local observers see these
developments as setting the stage for a tough contest during Karabakh
parliamentary elections due later this year. Pro-Ghoukasian Democratic
Artsakh Union currently has a majority in the 33-seat Karabakh
legislature, with Dashanks forming the second largest faction. (Sources:
Armenia This Week 6-18, 8-23; ; RFE/RL Armenia
Report 12-29, 1-7, 1-17, 21; Hayakakan Zhamanak 1-18, 19; Arminfo 1-20,
21; Noyan Tapan 1-18, 20)

A WEEKLY NEWSLETTER PUBLISHED BY THE ARMENIAN ASSEMBLY OF AMERICA

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From: Emil Lazarian | Ararat NewsPress