NOT SHELLS AND BOMBS ARE CALLED TO DETERMINE THE SITUATION IN OUR REGION

ArmInfo News Agency
23 Dec 06

Interview of ex-speaker of RA Parliament, leader of "Orinats Yerkir" party,
Artur Baghdasaryan, to ArmInfo News Agency

Mr. Baghdasaryan, how do you appreciate the current processes in
our region and what the behavioral line of Armenia must be as not
to be an outsider of the common way of South Caucasus development,
if this way actually exists?

I may assure that the current geopolitical processes and their
development tendencies bode nothing well to Armenia in view of an
extremely initiative-free foreign political policy, which is carried
out in our country. We have to understand that the world political
centers do not intend to bother themselves with our cares, they are
waiting for initiatives and activity from us, by means of which we
could talk to the foreign world. Actually, not shells and bombs but a
political will and new competitive ideas are called today to determine
the situation in our region as a determinant. It means that we should
not give the priority in our policy to confrontation, but to trend
towards fulfillment of a healthy competitive struggle. And so, we have
to sooner realize that our neighbors are our rivals but not enemies. It
is important in so far as the overwhelming majority of the countries
of the region, we are in, has a clearly expressed task of integration
into the European structures, into a civilized family. They do go in
this direction. Meanwhile, we isolate ourselves instead of seeking
for the new approaches with respect to the two important players,
Turkey and Azerbaijan. We have to understand that if Turkey strives
today after the European Union, we, showing a flexibility, have to
sit at the Table of negotiations with Turks and try to find mutually
acceptable decisions. And what is of most importance, and we see
it well, the Turkish train has already started and keeps on moving
towards Europe. The train moves heavily, with artificial barriers on
the way, but it moves. That’s why we should not prevent each other from
developing by putting spokes in the wheels of the European locomotive
but, on the contrary, should try to do out best to put our locomotive
on this track.

Do you think it will be welcomed in Europe with an orchestra?

I think Armenia is able to play a key role in this integration
process. Why? Because, being a country, which has extremely strained
relations with the two of its four neighbors, Armenia is able to show
to the world its competitiveness based on the values of democratic
society, having displayed a foresight and diplomatic tolerance. We have
no oil, we are not a country with 60 million population. That’s why
we should use the chance we have – the chance to appear in the world
as a freely developing and truly democratic state. As regards the
sore subject if our relations with neighbors, healthy compromise is
certainly more important and useful that stubborn head-on enmity. We
should understand that the key geopolitical processes developing in
the region are incompatible with our current policy.

After all, the major document, a so-called , is signed with the
European Union within the frames of a new neighborhood policy.

Yes, on a paper, but we have to do the best, in a real life as not to
become an outsider, since Armenia remains aside of the major regional
economic programs. Those separating lines, which are created today
in the region, are not advantageous to our country. It’s only a
one purely political argument to be hardly argued since the facts
are on hand. There are other arguments here as well if consider,
for example, the situation and the processes developing around Iran
and in Iraq, if take into account the possibility of forming the new
states in this region. Armenia, as a state, can certainly play here
a definite role, including the institutional one, being invited to
discuss these issues. However, to be evaluated as a useful partner,
we have to refuse of building a close society based on a fear, to
refuse of the democracy imitation and to seriously start forming a
true democracy in the country based upon the key rights and freedoms
of citizens. This is already a domestic argument to the aforesaid.

Let’s go back to the . Once someone said: . You urge not to be late
but, having jumped on a loop step, we actually refuse of that of
no small importance what is received to call a guaranteed security
system. If discount a stillborn divorce CIS, then, probably, one
should not discount Russia as a partner and the CSTO it has created?

Nothing should be discounted, especially Russia as a partner and a
friendly country for us, as well as the CSTO as a security system,
until regulation of our relations with neighbors. I am far from
such ideas, however, I am sure and I have openly told about it to
my Russian counterpart- politicians who, by the way, understand me,
that the democracy is best security factor in XXI century. The matter
concerns security achievement by the society democratization. I do
not accept a marginal approach and object to oppose the CSTO and NATO.
It is, at least, incompetent to consider the North-Atlantic alliance
as a military unit only. The NATO has two constituents, a military
and political. My position is to maximum bring together the relations
of Armenia with the NATO’s political component, that will strengthen
both our Army and our political and civil Institutes.

It is difficult today to tell about the policy change since there is
no policy, we have not yet found where we are and where we go. We
have to clarify ourselves whether we join the "Russia- Belarus"
union or we’ll be the members of
the western European club, maintaining at that the best and kindest
relations with both Russia and Belarus. We will be able to build
neither the security
system nor the economic system until we understand what we
want. Everything
happens here per situation, abruptly, fragmentarily. One thing is
necessary – we are doing this one today, another one – tomorrow.

Is it a hint at a so-called complementarism in the country’s foreign
policy?

Complementarism is mainly a derivation from suspense of the Karabakh
problem. This foreign political thesis has proved itself, it played a
definite favorable role, however, it started to become outdated and
no one in the world perceives it seriously today. The critical mass
of complementarism is exhausted, he said and added it is necessary
to seek for the new ideas concordant with the situation and the
time. Compromises in the Karabakh issues must be searched as well, the
ex-speaker said. "The extreme ideas are unacceptable, since the future
is always more important despite the hard way, passed by our people.
For the same reason, the recognition of Genocide should not be a
cornerstone of the foreign policy as well. Well, let’s suppose some
countries more recognize the Genocide. What is next? We bow to the
memory of the Genocide victims, this fact is unofficially recognized
by the whole world community. But what we receive, carrying it as a
standard over the head? A moral satisfaction? And where is the real
policy then? The Genocide issue can be only a component of the foreign
policy to be elaborated. We have to build our foreign policy counting
on the future, for the sake of our children. Look, the Germans had
forced the whole Europe to its knees some 60 years ago, killed the
millions of people, destroyed London by bombing, razed Warsaw to the
ground. But now the Great Britain, France and Germany are building the
European Union and Poland has also joined them. This is an example
of a real policy based on democracy. Today, Turkey makes its way
towards Europe and we also have to go there and talk to it.

I would like to especially note that it is normal when
nationalistic ideas exist in our society, it is normal for a healthy
society. However, these ideas should not dominate since they start
to prevail, the society falls into an atmosphere of extremism, with
elements and properties, typical for such a society.

Georgia straightly aims at NATO. But along with it, participating
in all the regional energy and transport projects, it will soon
assure itself a maximum possible discretion from Russia. However,
all these projects pass over Armenia and if a railway plan of
Kars- Akhalkalaki-Tbilisi is implemented, the circle will close in
fact. Whether you are anxious about such a prospect?

Very much. Implementation of this project will seriously affect the
regional situation. The forecasts may be very unfavorable is consider
such a factor as Javakhk. However, Georgia today already receives
great means from oil transit by Baku-Jeihan pipeline. Azerbaijan
increases the economic power, attracts great investments, and only
in the oil-gas sector, while our newspaper editors in Armenia go on
a forced leave through a shortage of printing paper. A paradox, when
the country depends on conditions in the only Ukrainian harborage.
We should understand that without worthy throwing off the burden of
serious problems with neighbors, the only regional economic market will
be actually inaccessible for us. The whole civilized world community
considers the South Caucasus as a single whole. If we can become its
constituent part, be sure, there will be no question of building
a new economically ineffective railway communication passing over
Armenia. There our state interest lies in and the country’s future
must be built on its basis.

What’s the role of statements concerning the country’s foreign policy
in your resignation?

I would like to remind once more that we had disagreements on three
key directions of both the foreign and home policy. We have already
talked of the first one. It is impossible to long sit on several
swinging chairs simultaneously. The sooner we clarify our foreign
political priorities, the faster and more we’ll win. The second
principal disagreement concerned the ways of corruption- fight. One
should be naive to think there are places in the world where this
phenomenon is absent, however, the corruption has become a system in
our small country. This system crisis eats up all the healthy sprouts
in our political and economic field. We have always talked of these
phenomena. For example, what is the purpose of privatization? It is
an achievement of efficient management based on a thesis that an owner
is the a better manager than the state. We should solve the problem of
efficient management and economic reproduction though privatization. We
are not solving these problems now since privatization has become a
means of personal enrichment only.

Moreover, a means of short-term enrichment.

Quite right. If the task is incorrectly set, quite another result
is received as a consequence. The initial target setting is that the
privatization process, as a result, comes to enabling the monopolistic
structures and persons to receive super-profits.

The third disagreement concerned the issue of the country’s
democratization and construction of an open society. Imitation of
democratic processes and the democratic processes themselves are
quite different things. We follow an ostrich policy, having buried
our heads in a sand, and we think no one see us and notice our
"pranks". However, the democratic countries, our partners, see the
imitation of democratic processes in our country. Well, perhaps, we are
in a better condition than, for example, Azerbaijan, from the viewpoint
of democracy development, but we forget that Armenia and Azerbaijan
are considered in different planes. Azerbaijan is often overlooked
and not due to the oil factor, due to the political and economic
role of this country in the region, as well as taking into account
the factors of Iran, Turkey and GUAM, which since becomes not so
great but still a factor. Armenia does not have such "privileges". We
cannot compare us with Azerbaijan in all this. We have no other way
under these conditions but to create an open society. Legitimacy of
authorities plays a topping role here, the human rights and freedom
of speech play a no less role. Under conditions when the judgments,
passed in the country, are known in many cases in advance, when there
are no free electronic Mass Media, when the economy market is not
free and monopolized, one does not have to seek for odd trumps.

One thing more. If someone thinks it is easy to refuse of the
Parliament speaker’s post, he is mistaken. However, I’ve done it
and the "Orinats Yerkir" party supported me for the sake of future
reforms since, being at a power, we, the party members, made more
and more sure that we deal with deep system processes and not with
a transient period waste. We tried to perceive the power as a chance
to reform the public institutes, a necessity to change the people’s
life. That’s why, we received many strikes when leaving the power:
we faced treachery and loss of friends and experienced different
kinds of pressure. However, having overcome this trial, we underwent
a self-purification process, we strengthened and have become one of
the most capable and organized political forces. We shall fight for
our ideas and their realization. We are ready to do it openly and
not on the quiet like some others.

Informal relations and informal public institutes are formed and
root in Armenia. That is, we start to live rather by concepts than
by Law. Some allegedly connect it with our mentality, our genetic
inability of building a open civil society.

Mentality is of high importance, however it is stupid to
impute everything to it since the power is, first of all,
a responsibility. The power has a unique chance to create and
form definite rough rules of play in the society and control their
observance. The state should oblige the same oligarches to work under
conditions of open market and not on the contrary. We have informal
institutes – oligarches, for whom there are no Laws, they live by
their own concepts and laws. The state gives kopecks to the Police
and says: . The state official, having definite power controls,
takes bribes to assure a better life for himself. And what will he
do if the Chief-Minister looses millions in the
Moscow "Crystal" casino? That is the hidden motive of everything
what we so
comfortably "shake off" to the national mentality. We have to stop. We
need a
political will to eliminate all this. If a foreign company blames
today the
Government member for bribe-taking at the rate of $3 mln, such a
scandal in any other civilized country would become a reason for
a serious open trial and would possibly cause a resignation of the
whole Government. The examples are not so far: scandals in Hungry,
Poland, Sweden, Italy, while we said and forgot: .

Your estimation of the oppositional field from the viewpoint of
ideological basis.

There is no competition of ideas, a worthy rivalry in Armenia. There
is a competition of interests – a private, personal, group. I think
the opposition has a potential for unification and this process will
take place irrespective of the fact if it happens before or after
the Parliamentary elections. A problem of consolidation of parties
is available in Armenia. Existence of 70 parties in the country
with 2.5 mln population is an abnormal phenomenon. In my opinion,
this points to deideologization of the political field. The matter
concerns both a power camp and the oppositional environment. It is
the time to recomprehend the political processes in the country. I am
sure that Armenia will pass a qualitatively new development stage. We
are neither Turkmenia nor Belarus. The Turkman has a choice between
several hundreds of dollars per month, free gas, oil and obscurity. He
chooses the first one. The Belarusian also chooses the first one,
especially as the election spots of Lukashenko were built on a
contrast of the life level in Belarus, and how do you think where?
That’s right, in Armenia! Just remember the slogan: choose or you
will loose! The people of Armenia, though with another mentality,
has even no election choice today.

What’s the place of "Orinats Yerkir" in the alignment of oppositional
political forces in the country?

We are a moderate oppositional force. The extremism is not acceptable
for us in no sphere, neither an extreme liberalism in economy and
an extreme-nationalism in policy. We are the carriers of a classic
right-centrist ideology today. Several thousand new members join us
every month. We total 83,000 people. Our party is liberal-democratic
and it sees the country’s development in a priority of achieving an
economic competitiveness and in active regulation of the economic
field by the state. You see, I am talking not of management but only
of an efficient regulation by means of state institutes.

What are your forecasts concerning the coming elections and the
new Parliament’s staff? Whether the new financially-strong forces,
which are actively gathering the electorate today, will not create
a disbalance in the new Parliament, having the active ?

I have several possible scenarios on this account. The first
scenario: the power will show a political will and will organize
normal fir elections. The political players understand the importance
of this scenario. The matter here concerns the normal and not ideal
elections. The fulfillment of this scenario will lead the country by a
quite another way. However, we do not see a political will available
today for implementation of this version since the opposition is
deprived of an opportunity to talk to the society because of the
developed oligarchic system and a full control of the electronic
Mass Media.

According to the second scenario, there can be great falsifications,
which will inevitably cause social conflicts inside the society. You
see, everyone understands that the President is leaving, having
completed its term, and there is an opportunity to form a new
power. If there are great falsifications, great collisions will be
inevitable. Very different versions of the events development are
possible, which will cause an extremely strained situation in the
public- political life, the result of which is sad.

The third version: due to great money and administrative controls,
an attempt will be made to imitate the democratic elections. This
scenario also proves itself. Denis Corboy, a good friend of mine,
a British political analyst, a Head of supervisory missions in many
countries, had to tell me: . After Georgia, we are the only in CIS
counties, except the Asian ones, the state of affairs in which will be
controlled by the West with special responsibility. The Europe will
not keep mum and not because it is so anxious about us, but based on
its political interests. The imitation will not work. If there are no
social collisions, the country will face serious reputation problems
and the inner political and social tension will grow.

There is the fourth, optimistic scenario. The authorities will show
a political will and will come to an agreement with the key players
in the political field for conducting normal elections.

But you said we are already behind this scenario?

But this possibility still remains in some aspect. The first condition
is to accept the Electoral Code by a political consensus. The
second condition is a normal administration by the election process
before elections, during and after them. The third condition is an
efficient carrying-out of the election process for the people to
see that the political forces are enabled to talk to the society,
to bring their ideas and programs to the society. It is naive to
think that the oligarches will not make falsifications. However,
having this scenario, the authorities will not assume a liability for
that. It warns that any violation will be severely punished. If you
are an <Ñ~E> oligarch and you have stolen the ballot-box, you will
be tried. In short, the power take the steps which are positively
perceived by the society and it goes to the elections. They may be
non-ideal but mainly fair. This scenario can be real since there is
no other way out and there is still a time to change the situation.

If the power refuses of this version, mass protest actions, meetings
may happen in the country before and after elections. Arrests
are not ruled out either. However, one should remember that a new
election Presidential race will start in a couple of months after the
Parliamentary elections. There have been no such a situation in Armenia
yet to be fraught with such a great public energy. The society will
not stand such a permanent pressure if it is not deferred to and a
destructive effect of spring may work both inside the country and
outside it.

Interview by Emmanuil Lazarian

December 18, 2006

"SHEN CONCERN" CJSC STARTS ISSUING THE FIRST CORPORATE BONDS OF
NON-FINANCIAL SECTOR IN ARMENIA

Yerevan, December 21. ArmInfo. In December 2006, the Armenian "Shen
Concern" CJSC, the leader in construction materials production in
Armenia, issued nominal, undocumentary, discount bonds. This is
for the first time an Armenian manufacturing venture enters the open
securities market with corporate bonds. The Armenian Central Bank has
recently decided to register the issue prospectus of these securities,
after which the public bond placement will start.

The "Shen Concern" company told ArmInfo that the total nominal value of
the bonds will make up 160 mln AMD. The bonds will be placed in four
equal tranches worth 40 mln AMD. Each tranche consists of 4 thousand
bonds worth 10 thousand AMD per bond. The annual bond yield of the
first tranche is fixed at 9%. According to a preliminary estimation,
the proceeds from the sale of the first tranche will make up 36 697
248 AMD. This sum will be directed at refinancing of the company’s
debt. The underwriter of the issue will be the "E-Capital Asset
Management" CJSC. The bond turnover is 365 days starting from the
last day of placement.

At the moment, the "Shen Concern" CJSC produces construction materials,
paints, putty, it is also engaged in construction and trade of
construction materials. The company is also planning to establish
new types of production.

By September 30, 2006, the company’s proceeds from the sale made up
1 462.0 mln AMD, and in 2005 – 1 243.2 mln AMD as against 1 073.1 mln
AMD in 2004. The net profit totalled 272.3 mln AMD as against 36.1 mln
AMD in 2005 and 201.9 mln AMD in 2004. According to the specialists of
the company, in Jan-Sept 2006 the volume of sales increased by 17,6%,
while the net profit grew by 653,5%. The high rates of profit growth
are explained by the decrease of the cost price.

The specialists of the "Shen Concern" CJSC inform the future
bond-holders about the potential risks, such as possible lack of
well-organized liquid market of bonds in Armenia, the possible
fluctuation of interest rates on the financial market. The company
also admits that some changes may take place on the construction
market of Armenia, though over the past few years this sector of
economy has been steadily developing. Some risks may be connected
with failures in supply of raw material for the production.

To remind, at the end of 2004, the holder of 24% of "Shen Concern’s"
shares worth 850 thsd EUR became the European Bank for Reconstruction
and Development, which bought 12% more shares of the enterprise
in July, 2005. These are the first investments of the EBRD in an
Armenian private industrial enterprise. The rest of the shares belong
to the company’s top- managers. To note, the Armenian Central Bank,
which has been awarding ratings to various non-commercial enterprises
of the country since last year, gave "B" high rating to the "Shen
Concern" CJSC. The CB specialists estimated the company’s financial
activity by 3.86 points, the quality of the activity – 4.5 points,
the average mark is 4.18 points. In this connection, the CB is ready
to accept the bonds issued by the company as security while concluding
REPO-agreements with commercial banks. This considerably contributes to
the increase of the bonds’ liquidity and gives investors an opportunity
to enter the market of alternative financial instruments.

NEW AGENCY AMRATING IN GLOBAL RATING GROUP

London, December 19. ArmInfo. A new agency AmRating (Armenia) has
occurred in the Global Rating Group. The agency has prepared its
first analytical product "Review of Armenia’s Banking System."

Global Rating press-service reports the product gives an analysis of
the state of Armenia’s banking system, as well as of the risks and
problems in its development. The product also presents the leading
banks in the country and their investment attractiveness.

A positive factor of the Armenian banking market is its low
politicization due to the insignificant level of penetration of
political interests into the market. The development level of the
banking system leaves behind the general economic level. Thus, the
market of banking services is attractive for foreign investors. Healthy
and strong competition between the Armenian banks allows avoiding
monopolies in the banking market of Armenia. The strategic development
of big banks considerably influences the general development trend
in the banking sector.

Mr. Richard Hainsworth, Global Rating Group President, says the Review
of Armenia’s Banking System symbolizes the successful start in the
activity of AmRating and the fulfillment of the strategic plan of
Global Rating Group to open rating agencies in CIS.

Each country has not only a unique culture, mentality and language,
but also financial market. The agency will rely only on local
personnel. This is the fundamental decision of the group, which will
bring benefit to banks, clients, partners and potential investors in
the CIS, Richard Hainsworth says.

Mr. Emmanuil Lazarian, the head of the agency in Armenia, believes
that the establishment of the national rating agency will ensure an
unbiased stand on the development of the growing banking system in
Armenia, and on other segments of the financial market, which are
on the way to fundamental reforms. He says the goals and the tasks
of the agency are in harmony with the policy of Armenian Central
Bank regarding the planned transition of the country’s commercial
banks to Basel II principles connected also with introduction of
the systems of internal ratings and market analyses. "When preparing
the review, our analysts enjoyed the readiness of the Central Bank
and the commercial banks of the country to assist us in our work,
which is a good start," Mr. Lazarian said.

The first successful project of Richard Hainsworth in the establishment
of national rating agencies was RusRating agency. The agency has
been operating in the Russian market for over 5 years. Its rating
list comprises 45 banks and a leasing company. KzRating agency,
another project of Richard Hainsworth in Kazakhstan, launched its
activity in March 2006. All the national agencies established by
Richard Hainsworth are united in the Global Rating Group.

–Boundary_(ID_/6lUaf4KUgoIGyAbGQh0PA)–