Author: Badalian Vardan

AGBU Press Office
55 East 59th Street
New York, NY 10022-1112
Phone 212.319.6383 x.118
Fax 212.319.6507
Email [email protected]
Website

PRESS RELEASE

Monday, January 3, 2005

AGBU YOUNG PROFESSIONALS RAISE $3,000 FOR AGBU CHILDREN’S CENTERS IN
ARMENIA! AGBU-YPNC TO HOST 6th ANNUAL “WINTER GALA GETAWAY WEEKEND”
ON JANUARY 28-30, 2005 IN DOWNTOWN SAN FRANCISCO

San Francisco, CA – In anticipation of the sixth annual “Winter Gala
Getaway Weekend” from January 28-30th in downtown San Francisco, AGBU
Young Professionals of Northern California got a head start on
November 12th. A successful fundraiser was held at a new lounge in San
Francisco and raised $3,000 for the AGBU Children’s Centers in
Armenia.

Armenians and their friends came out to “Blend,” a new trendy hotspot
in the heart of San Francisco’s North Beach. Guests arrived throughout
the evening and were greeted with a great mix of people and live
music. Along with funds raised for the AGBU Children’s Centers, the
evening was an opportunity to offer the details of the highly
anticipated “Winter Gala Getaway Weekend” set for January 28-30, 2005.

This three-day weekend extravaganza will kick off on Friday January
28th at Schroeder’s with a live DJ for guests to meet, mingle and
dance. During the day on Saturday guests will have the opportunity to
walk around beautiful San Francisco, shop, ride cable cars or visit
Fisherman’s Wharf and the Golden Gate Bridge. Saturday night’s Winter
Gala will take place at The Lodge in the Regency Building. The evening
begins with a cocktail hour, followed by a gourmet dinner and then
dancing to George Baghdoyan’s band. The festivities conclude on Sunday
with a farewell brunch. Stay tuned for more detailed information.

Guests will stay at Hotel Nikko on Union Square where they will enjoy
the finest in luxury accommodations. To reserve your room, call
reservations at 1-800-645-5687 or 415-394-111 and mention code:
AGBU. The special room rate of $155+tax, is available until December
24th and while rooms remain! Reserve your rooms now so you don’t miss
out on this unique opportunity to stay in one of San Francisco’s top
hotels.

For more information about the weekend, please contact Sako
Soghomonian at [email protected] or (510) 259-7737, or visit
our website

news.com.au
January 1, 2005

Yushchenko rings in New Year

>From correspondents in Kiev, Ukraine
January 1, 2005

UKRAINE opposition leader Viktor Yushchenko rang in the New Year with
Georgia’s leader today in central Kiev, hours after Prime Minister Viktor
Yanukovich resigned and all but admitted losing a presidential rerun vote.

In an appearance sure to irritate Russia, Georgian President Mikhail
Saakashvili joined Mr Yushchenko in hailing Ukraine’s “orange revolution”,
which followed Tbilisi’s “rose” uprising last year.

“This is a triumph of good over evil,” a beaming Mr Saakashvili said in
Ukrainian to some 100,000 people gathered in Kiev’s central Independence
Square, the epicentre of the “orange” protests which he fervently supported,
albeit in private.

“I am a president and because of my official position I couldn’t come here,
but my heart was on Khreshchatik (Kiev’s main thoroughfare)… I must say
that these last few days I have felt like a native of Kiev,” said Mr
Saakashvili, who attended university in the city.

“I wish you a happy new year with your new president,” he said. “You have a
super president, he is a good friend of mine and a great politician.”

For his part Mr Yushchenko said: “Ukrainians have been independent for 13
years but now they are free,” a few moments before midnight when fireworks
exploded over the Kiev sky.

The celebration came hours after Mr Yushchenko’s pro-Russia electoral rival
Mr Yanukovich resigned from his post and said that his appeals over the
historic December 26 vote were unlikely to be granted.

“I have made a decision and am formally submitting my resignation,”
Yanukovich said in a televised address. “I find it impossible to occupy any
post in a government headed by these authorities.”

But Mr Yanukovich stopped short of conceding defeat in the poll, which would
have brought Ukraine’s six-week election saga to an end.

“Concerning the election results, we are keeping up the fight but I don’t
have much hope for a just decision from the central election commission and
the supreme court,” he said.

Mr Yanukovich repeated his assertion that “external forces” were responsible
for his defeat in the December 26 vote.

But he got no support from Ukraine’s outgoing President Leonid Kuchma, who
called on the nation during his New Year address to “accept the democratic
choice” made in the presidential poll.

Ukraine’s “orange revolution” marked the second year in a row that peaceful
protests headed by a Western-leaning leader swept out a Russia-friendly
regime in an ex-Soviet nation.

Moscow has accused the United States of fomenting the unrest in order to
install allies in its strategic backyard, charges that Washington has
denied.

But opposition movements in authoritarian-leaning former Soviet republics
and Russia have hailed the peaceful uprisings and in the heat of the
“orange” demonstrations, Belarussians, Armenians, Azeris and Russians
mingled with Ukrainian protesters in central Kiev.

Earlier yesterday, Mr Saakashvili was mobbed by hundreds of wildly cheering
opposition supporters as he walked through a tent city in central Kiev set
up in Mr Yushchenko’s support after he refused to concede defeat to Mr
Yanukovich in a November 21 runoff because of fraud.

Mass opposition demonstrations led to the annulment of the runoff election
due to massive fraud, remade Ukraine into a de facto parliamentary republic
and led to a historic rerun vote on December 26, which Mr Yushchenko won by
more than 2.2 million votes.

Agence France-Presse

PRESS RELEASE
Armenian International Policy Research Group
P.O. Box 28179
Washington, DC 20038-9998
USA
Phone: (202) 623-8605, (202) 458-2589
Fax: (202) 478-0934
E-mail: [email protected]

Yerevan Office
40 Baghramian Ave.
Yerevan, Armenia 375 019
Phone: (3741) 512-670
Fax: (3741) 512-679

Third Annual AIPRG International Conference on Armenia

Income Distribution and Social Safety Nets

January 15-16, 2005

The World Bank

For online registration, go to:

Conference Program

Day 1: Saturday, January 15

7:30 AM Registration and Coffee

8:30 AM Introduction and Welcoming Remarks

Introductory Remarks: AIPRG Co-Chairs

Welcoming Remarks: H.E. Arman Kirakossian, Ambassador of Armenia in the U.S.

Keynote Opening Address: Vahram Nercissiantz, Chief Economic Adviser to the

President of Armenia and AIPRG Advisory Board

Conference Thematic Address: Haroutone Armenian, President of American
University of Armenia and AIPRG Advisory Board

Session I – Growth and Development

Chair: Mohsin S. Khan, Director, Middle East and Central Asia
Department, IMF*

9:30 AM Julian Karaguesian, Ministry of Finance, Canada

Reversing Armenia’s De-Industrialization: the Role of Strong Governance and

Solid Institutions

Discussant: Saumya Mitra, Lead Economist, The World Bank

10:15 AM Bryan Roberts, BearingPoint, USA

Armenia’s Remittances: Economic Impact and Optimizing Strategy

Discussant: Ralph Chami, Deputy Division Chief, International Monetary Fund

11:00 AM Coffee Break

Session II – Macroeconomic Policies

Chair: Padreep Mitra, Chief Economist, Europe and Central Asia Region,
The World Bank *

11:30 AM Bagrat Tunyan, The World Bank Armenia Office

The Shadow Part of the Armenian Economy: Size, Causes, and Consequences

Discussant: Professor Jeffrey Miller, University of Delaware

12:15 PM Grigor Sargsyan, Central Bank of Armenia

Inflation and Output in Armenia: the Threshold Effect Revisited

Discussant: Levon Barseghyan, Assistant Professor, Cornell
University and AIPRG

1:00 PM Lunch (World Bank Executive Dinning Room)

Keynote Luncheon Speaker: Professor William Easterly, New York

University, Department of Economics*

Session III – Poverty and Income Distribution

Chair: Ad Melkert, Executive Director, The World Bank, and AIPRG
Advisory Board

2:30 PM Gohar Minasyan, IMF Armenia Office

Aghassi Lazarian, UNDP Armenia Office

Factors Behind Rural Poverty in Armenia

Discussant: Martin Ravallion, Research Manager, The World Bank*

3:15 PM Astghik Minasyan, Ministry of Labor and Social Issues, Armenia

Hasmik Ghukasyan, USAID/PADCO Armenia Office

Targeting State Social Assistance to the Most Needy: the
Armenian Experience

Discussant: Professor Ara Khanjian, Ventura College and AIPRG

4:00 PM Coffee Break

4:30 PM Discussion Session IV – Reforms in Health and Social Services

Chair: Carolann Najarian, President, Armenian Health Alliance

Panelists: Sergey Khachatryan and Lusine Aydinyan, Health Project
Implement. Unit, Arm.

Beneficiary Assessment of the First Stage of Armenian Health Sector
Optimization

Marine Adamyan, World Vision Armenia Office

Integrated Approaches to Well-Being and Quality of Life
Improvement

Hilda Grigorian, Grigorian Business Consultants, USA

Trafficking of Women and Young Girls in Armenia: Reality or
Myth?

8:00 PM Reception at the Armenian Embassy in Washington, D.C.

Hosted by H.E. Ambassador Arman Kirakossian

Location: Embassy of the Republic of Armenia

2225 R Street, NW

Washington, DC 20008

Day 2: Sunday, January 16

Session I – Governance and Civil Society

Chair: E.J. Dionne, Senior Fellow, The Brookings Institution*

9:00 AM Arman Khachaturyan and Mark Airaudo, Centre for European Policy
Studies, Belg.

The Political Economy of Transition in Armenia: Quo Vadis?

Discussant: Phil Uhlmann, Assistant Professor, Bentley College and

Fletcher School of Diplomacy, Tufts University

9:45 AM Anna Ohanyan, Simmons College and University of Massachusetts,
USA

Civilizing Civil Society: Framework for Tri-Sectoral Civil
Society Engagement

and Negotiation Culture in Armenia

Discussant: Professor William Ascher, Vice President and Dean of the
Faculty,

Claremont McKenna College and AIPRG Advisory Board

10:30 AM Coffee Break

Session II – Public and Private Services Provision

Chair: Michael Blackman, Deputy Director, Office of Economic
Restructuring and Energy,

US Agency for International Development, Mission to Armenia

11:00 AM Paul Holden and Vahe Sahakyan, The Enterprise Research
Institute, USA

Issues Related to Promoting Competitive Business Environment in
Armenia

Discussant: Professor Richard Beilock, University of Florida and
AIPRG

11:45 AM Audrey Selian, Fletcher School of Law and Diplomacy, USA

The Use of IC Technologies in the Armenian Government

Discussant: Greg Aftandilian, Independent Consultant

12:30 PM Lunch (Lobby of the Main Complex, The World Bank)

Keynote Luncheon Speaker: Vahan Zanoyan, President and CEO,

PFC Energy Corporation

2:00 PM Discussion Session III – Trade and Geopolitics

Chair: Hratch Tchilingirian, Associate Director, Eurasia Program, Judge
Institute of

Management, University of Cambridge, UK

Panelists: Karine Torosyan, Department of Economics, Oregon State
University, USA

Armenia’s Trade Structure in Comparative Prospective

Asbed Kotchikian, Boston University, USA

Border Politics: the Political and Geopolitical Implications of
Opening of

Turkish-Armenian Border

Richard Giragosian, Abt Associates and AIPRG

Toward a New Concept of Armenian National Security

4:00 PM Discussion Session IV – Diaspora-Armenia Economic Link

Chair: Noubar Afeyan, Managing Partner and CEO, Flagship Ventures

and Senior Lecturer, Massachusetts Institute of Technology

Panelists: Berge Ayvazian, Armenian High Tech Council of America and AIPRG

Strategic Direction’s of the Diaspora in Armenia’s Economic
Development

Aaron Shirinian, U.S. Embassy in Armenia

On Donor Aid Coordination and Its Relevance for the Diaspora
Assistance

Kaia Miller, Aslan Global and Armenia2020

The Essential Element in Effective Diaspora-Homeland Partnerships: A
Discussion of Views from Armenia and Its Diaspora

* – invited.

BUDGET OF DEVELOPMENT AND PROSPERITY

Azat Artsakh – Nagorno Karabakh Republic (NKR)
30 Dec 04

Taking into account the fact during the discussion of the package of
the adherent documents of the state budget 2005 that there was
disagreement only in reference to one of the points of the bill `On
Amendments to the NKR Law on Income Tax’, we may state that on the
whole the government and the National Assembly achieved mutual
understanding. How would you explain this?` First of all, the
government had a serious and responsible approach towards the budget
for the next year assuring its realistic nature. Discussions at the
bodies of the executive, as well as the committees and factions of the
National Assembly in their turn favoured the accomplishment and
clarification of the document. As a result we worked out a document
which will not be an exaggeration to call a program for future
development. Naturally, this served as a basis for full mutual
understanding. – Although the economic year has not closed, it is not
difficult for the minister of finance and economy to present the
anticipated social-economic indices through the analysis of the
results. – First of all, I want to emphasize that the macroeconomic
rates describing the social and economic situation of the passing year
are promising and will serve as good basis for more serious programs
in the coming year. Observations show that the GDP of2004 will total
41.4 billion drams. In order to highlight the significance of this
number I will add that against the previous year it will grow by 15.3
per cent. We anticipate that budget revenues will total 4550.0 million
drams, that is to say, the growth against the previous year will total
43.5 per cent (3170.1 million drams in 2003). The volume of industrial
production will total 18 billion drams (11.1 billion in 2003), and
gross agricultural output will total about 22.3 billion drams,
exceeding the rates of the previous year by 62.2 and 6.1 per cent
respectively. In the republic about 137.0 million kWh of electricity
will be produced (in 2003 130.6 kWh) growing by 5 per cent. Thevolume
of capital building will total 9.2 billion drams (in 2003 8.7 billion
drams) increasing by 5.7 per cent against the previous year. In 2004
the number ofworkers in the republic will total about 34.7 thousand
people growing by 6.2 per cent (more than 2000 jobs). In 2004 the
average nominal salary will total 40 thousand drams (growing by 18.8
per cent), the income of the population will total 42.0 billion drams
(growing by 22.1 per cent). The volume of foreign trade of NKR in 2004
will total 60.2 billion drams growing by 23.6 per cent, export will
increase by 22.7 per cent (totaling 20.9 billion drams) and import by
24.1 per cent (totaling 39.3 billion drams). The total sum on credit
accounts ofthe population by December 1, 2004 was 9.5 billion drams
growing 2.2 times or by 5.2 billion drams since the beginning of the
year. The dynamics of growth of these indices testifies that
significant progress was achieved in the republic and a stable
economic sector was developed which supposes foreseeable
development. Now about macroeconomic forecasts for 2005. In 2005
social andeconomic policy of the Republic of Nagorni Karabakh will be
directed at the maintenance of the achieved high economic rates and
macroeconomic stability, improvement of the investment environment and
quality of life, continuous reduction of unemployment and solution of
social and economic problems. The average rateof the GDP for the years
2005-2007 is estimated about 11.3 per cent. In 2005 the estimated
actual growth of the GDP will total 11.5 per cent (48.0 billion
drams). The average index of the exchange rate of the Armenian dram
will be maintained in the correlation $1 for 500 AMD. In 2005 in the
republic capital building carried out on all the financial sources
will significantly exceed the level of the previous year. The
government will pay special attention to the development of small and
medium-size business which will become a significant factor in
creating jobs. Therefore in 2005 800.0 million drams will be directed
at development of small and medium-size business (against 200.0
million in 2004) of which 75 per cent will be spent on the development
of the agricultural sector (viticulture, cattle breeding, leasing of
agricultural machines, providing 200 million drams for each
branch). Here I should mention that about 30 per cent of the GDP of
the republic is provided by small and medium-size business owners. –
You mentioned that the growth of the gross agricultural output will
total 6.1 per cent. Compared to the growth of the GDP it falls back
ten times whereas there is more potential for development of
agriculture. – At the beginning of 2005 long-term programs for
development of the irrigation system will be launched (costing 500.0
million drams), as well as means will be provided for preservation of
forests (about 83.8 million drams). 50.0 million drams willbe provided
for restoration of forests. In 2005 tax policy will correspond to the
approaches adopted by the government in the recent years assuring the
development of the positive tendencies in the sphere, which will
favour thedevelopment of an active economic environment against the
general background of the economy and will result in economic
growth. – I think it will not be an exaggeration to say once again
that the budget of 2005 will traditionally have a social
character. How will this be expressed? – No doubt, the budget policy
of 2005 will focus on the solution of social problems, improvement of
quality of life on budget means. From January 1, 2005 the average
salary of teachers will grow up to 50500 drams (presently it is
30585), by 65.3 per cent. In 2005 the salaries of medical workers will
grow by almost 26 per cent totaling 36800 drams. The salaries of
workers of libraries, museums, cultural institutions and ensembles
will grow by 22.4 per cent (24 thousand drams). Pensions also will
increase since January 1, 2005. The basic pension will increase from
3000 in 2004 to 4000 in 2005 and the value of one year of service will
increase from 140 to160 drams. From January 1 the benefits of certain
groups of children will increase by 50 per cent. During the year
financial aid will be provided to 7 insecure groups. The veterans of
the Great Patriotic War, disabled, widows of the killed soldiers will
receive aid on the occasion of the 60th anniversary ofthe victory in
the Great Patriotic War on May 9 which will be doubled against 2004.
The state budget of 2005 having a social direction as the expenses on
the social sector total 58 per cent, as distinct from previous years,
significant means will be directed at the development of the sphere of
material production which will, in its turn favour economic
development. Thus, the brief picture of the 2005 NKR consolidated
budget is the following: income totals 9238.1 million drams, expenses
24178.1 million drams, deficit 14940.0 million drams. The budget
deficit will be made up on the means of the interstate loan providedby
the Republic of Armenia totaling 13636.6 million drams of which about
5.5 billion drams is accrued from duty payments at the customs border
of the Republic of Armenia for the consumers goods imported to NKR,
and 1303.4 million drams from other inner and outer sources. The
budget income in 2005 is estimated 6460 million drams against 4550.0
million drams in 2004, and the growth will total 42 per cent. I want
to draw your attention to the fact that only two years ago the actual
income of the state budget totaled 2235.0 million drams whereas the
index for the upcoming year already exceeds the level of 2002 three
times. As to the state budget expenses, since 2002 it has almost
doubled. The expected incomes of the community budget provide only 6.4
per cent of the consolidated budget revenues (tax on law, property,
local duties, and other types of income). The incomes of the NKR State
Fund of Social Insurance in 2005 willtotal 2732.1 million drams. In
2005 the state budget will provide 180.0 million drams for the
creation of the NKR real estate cadaster. – What is the picture of
budget expenses on separate spheres like? – 2005 NKR state budget of
expenses was worked out on the basis of macroeconomic forecasts and
budget rates for separate kinds of expenses. The measures for
improvement of the structure of the budget-finances institutions and
solution of social problems were also taken into account. At the same
time, the demand of maintaining the continuity ofthe measures provided
for by the 2004 budget was met. By the budget bill state budget
expenses were estimated 21400.0 million drams. Expenses on
educationand science total 16.3 per cent (3497.1 million drams) of the
total expenses. It is planned to open boarding schools from September
1, 2005 in Shoushi and Stepanakert to provide elementary and secondary
education to the children of socially insecure families. The estimated
expenses in the sphere of culture, youth and sport will total 748.4
million drams, which is 3.7 per cent of the budget expenses. These
include budget-financed institutions, competitions, services,
subsidizing of theatrical and concert institutions and editorial
houses. The 2005 state budget will provide 100.0 million drams for
restoration and repair of monuments. Taking into account the necessity
of development of sport in the republic, 98.9 million drams will be
provided for this purpose. The provided means will enable the
participation of our sportsmen in international competitions in
different sports and games. Of the sums provided for the development
of sport financial aid of 9.3 million drams will be provided to 15
sports federations and the NKR voluntary sports society. The expenses
in the sphere of health were planned 1210.0 million drams, which has
increased by 340 million since last year. The expenses in the sphere
of social security and social insurance will total 4490.0 million
drams which is 21.0 per cent of the budget expenses and has increased
by 317.7 million drams since last year. 576.6 million drams will be
provided for the benefits paid to separate groups of children. 190.0
million drams will be provided for the needs of the disabled of the
NKR defence and the families of the killed servicemen of which 150.0
million will be spent for providing families of killed soldiers with
apartments. Expenses in the sphere of agriculture will total 789.9
million drams of which 500.0 millionwill be spent on the programs of
irrigation. The financing of important activityin the sphere of
agriculture will continue (protection of plants, test for quality and
sorts of the seeds of crops, veterinary, sanitary service, etc.). –
What about expenses which are not in the main groups? – Transfers will
be made to the budgets of the municipalities totaling 592.6 million
drams. 3900.0 million drams have been planned for capital
investments. – Your opinion on the state budget not as a minister but
as a citizen of NKR. – Drawing your attention to the advantages of the
state budget 2005 I think the government is far from thinking that the
chief financial document of the coming year contains final settlements
of the problems in the spheres of life of the country as there remain
numerous unsettled problems. At the same time, working out the main
directions of social and economic development of the country in 2005,
we may state that the government showed a realistic approach in its
estimates, therefore the government is confident and determined that
it will bring into being its forecasts for 2005. The unprecedented
high social and economic rates of theclosing year underlie this
confidence. On the way of economic accomplishment NKR has achieved
significant progress. Using the occasion I wish our nation a HappyNew
Year and Merry Christmas.

M. PETROSSIAN.
30-12-2004

AzerNews, Azerbaijan
Dec 29 2004

Parliament speaker hopes for liberation of most Azeri territories
next year

Parliament speaker Murtuz Alasgarov believes that most of
Azerbaijan’s territories occupied by Armenia will be liberated next
year.

“I believe that a considerable part of our lands will be liberated in
2005”, Alasgarov told a plenary session of the parliament on Tuesday.

The speaker emphasized that the Azerbaijani government insists on a
stage-by-stage alternative for the conflict settlement, which
envisions withdrawal of all Armenian troops from the occupied
territories for a subsequent determination of the Upper Garabagh
status.

ITAR-TASS, Russia
Dec 26 2004

Armenia to send 46 military experts to Iraq

26.12.2004, 03.29

YEREVAN, December 26 (Itar-Tass) – Armenian Defence Minister Serge
Sarkisyan said on Saturday that Armenia would send 46 military
experts to Iraq to operate as part of the Polish contingent. The
group includes the commander, a communications officer, a platoon
commander, three doctors, ten sappers and thirty drivers.

The minister said that the U.S. command and the Polish division would
arrange logistics support, medical services, housing and utilities
for the Armenian experts.

The Armenian Defence Ministry received approval from parliament to
send the experts to Iraq for a year.

Sarkisyan understands that the arrival of the Armenian contingent in
Iraq could put the Iraqi Armenians there under threat. However, he is
convinced that `more dangers will emerge’ if the republic refuses to
take part in the post-war stabilization in Iraq.

`Armenia will have humanitarian rather than military presence in Iraq
because the Armenian and Arab peoples are bonded with centuries-old
friendship,’ the Armenian defence minister emphasized.

Arafat Authority Owns a Piece Of Bowlmor Lanes
BY RODERICK BOYD – Staff Reporter of the Sun

The New York Sun
Dec 23 2004

Greenwich Village’s Bowlmor Lanes is widely known as a popular place
for drinks, children’s parties, or bowling a few games at night or
on the weekend. Less well known is that Yasser Arafat’s Palestinian
Authority gets a cut of every beer bought and pair of shoes rented
at Bowlmor, via the $799 million Palestinian Investment Fund.

Indeed, according to an analysis of the fund’s investment activity
from December 2002 to December 2003 done by Standard & Poor’s,
the Palestinian people have about $40 million worth of American
investments. These include California real-estate holdings, wireless
technology stocks, and a piece of a well-known private equity fund.

The majority of the fund’s investments were in the Middle East,
including a $285 million stake in an Egyptian mobile-phone company,
Orascam Holding SAE, and its affiliates, and a $71 million joint
venture with England’s BG group, to explore for natural-gas deposits
off the coast of the Gaza Strip.

The investment fund’s chairman and CEO, Mohamed Rachid, did not reply
to e-mail inquiries seeking comment.

The S&P valuation of the fund’s assets was commissioned by the fund
when executives of international donors requested an accounting of
the fund’s assets.

To invest in America, the S&P report shows, the fund set up holding
companies in Delaware. Much of the legwork was done by a McLean,
Va.-based private equity fund, SilverHaze Partners LLC, whose managing
partner is Zeid Masri, an American citizen with two relatives on the
fund board, according to Bloomberg News. Mr. Masri did not return
several phone calls from The New York Sun. The fund’s 5.23% ownership
stake in SilverHaze’s management company was valued at $260,000.

In the case of Bowlmor, Mr. Masri set up a Delaware holding company,
Onyx Funds LLC, to invest $1.3 million in the bowling alley’s parent
company, Strike Holdings LLC. S&P valued the stake at $930,000,
citing the illiquid nature of the investment. The valuation did not
disclose whether the investment was profitable or whether dividends
were paid on it.

In a statement sent to the Sun by email, Strike Holdings’ CEO,
Thomas Shannon, said he had taken steps to sever the relationship
with SilverHaze immediately.

“This information was never disclosed to us previously and had we
known the source of these funds, which represents approximately 2%
of our company’s equity, we would never have accepted them,” he said
of the ties to the Palestinian Authority.

Another New York company that received an investment from the
Palestinian fund is Madison Avenue’s Delma Real Estate fund, according
to the valuation documents. The fund owns two buildings in Woodland
Hills and Sherman Oaks, Calif., the documents said. The Palestinian
fund invested in Delma via a wholly-owned subsidiary, Darnel Limited,
that was worth $6.6 million at the end of last year, S&P said. The CEO
of Delma, Kevork Toroyan, did not return a reporter’s call. Mr. Toroyan
is an Armenian, and according to the Web site of a charity with which
he is affiliated, the Armenian Fund, he was a member of a group set
up to support the 1993 Oslo Mideast accords.

The Palestinian Investment Fund, whose chairman, Mr. Rachid, was
installed by Arafat in June, did not have the Midas touch when it
came to timing many of the investments, according to the valuation
documents. For example, beginning in April 2000, SilverHaze’s Mr.
Masri began investing $25 million in fund capital in Internet stocks.
The vehicle Mr. Masri set up to make the investments, Chalcedony LLC,
put only $9.9 million to work before the Internet bubble cracked,
said the valuation report. The investment in Chalcedony – controlled
entirely by Mr. Masri, according to S&P – declined in value to an
estimated $4.4 million.

The Palestinian fund was created on Arafat’s orders by “diverted”
tax receipts Israel collected on goods shipped to the territories,
according to a World Bank report released in June. The diverted funds
– the exact amounts are not known – were supposed to be given to the
Palestinian finance ministry, according to an article in Bloomberg
News’s Markets magazine.

The fund also took a stake in the Canaan Equity Offshore funds,
two investment funds managed by Canaan Partners, a high-profile
private-equity firm with $2 billion under management and offices in
Menlo Park, Calif., and Rowayton, Conn. The Palestinian fund’s stakes
in one of the funds, Canaan Equity Offshore II, was valued at $1.1
million, and its stake in the other, Canaan Equity Offshore III,
was valued at $3.6 million. A call to the fund’s general partner,
Eric Young, was not returned.

One analyst of the finances of both Arafat and the PLO, Manhattan-based
historian Rachel Ehrenfeld, said the “so-called donors” to the
Palestinian Authority – including many member states of the European
Union and the World Bank – who demanded the valuation would not have
wanted to see a full accounting of the Palestinian Authority’s finances
from its inception in 1994.

“Arafat had $10 billion in assets in mid-1994, and this one-year
snapshot contains less than $800 million,” she said. “They don’t want
to know about the other $9 billion because they don’t want to know how
rich Arafat was, or how much he paid to murder thousands of Israelis.”

Ms. Ehrenfeld, who has written and lectured extensively on terrorism
financing, was highly critical of the Palestinian fund’s rush to
transparency.

“It’s nearly useless,” she said of S&P’s valuation work. “It covers
only one year, it’s already a year old, and doesn’t offer any
comparison to the previous years.”

EU prepares “neighbourhood report” on Azerbaijan

Trend news agency
22 Dec 04

Baku, 22 December: The European Commission has worked out a
“neighborhood report” on Azerbaijan, the EU special representative
in the South Caucasus, Heikki Talvitie, has said in an exclusive
interview with Trend news agency.

The European Commission called for the inclusion of Azerbaijan,
Armenia and Georgia in the European Neighbourhood Policy programme
on 12 May 2004, Talvitie said.

“Initially, this idea has to be approved by 25 members of the European
Union. At this stage, negotiations between the EU and Azerbaijan
will be conducted in this direction,” he said.

The neighborhood report reflected not only a political discussion, but
also [the discussion] of economic and social problems of Azerbaijan,
democracy and human rights, he said. “Europe wants its would-be
neighbors to be committed to the principles of democracy, the rule
of law and market economy,” Talvitie said.

Speaking about the conditions for joining the programme, Talvitie
said that the main objective is to develop democracy, protect human
rights, boost economic potential and so on. “Azerbaijan is already
one of the European countries and we attach major significance
to the stable development within the process of integration,” the
diplomat said. Appropriate documents on the programme have already
been submitted to the Baku government, in connection with which
Talvitie is planning his next visits.

64% OF SURVEYED FROM VARIOUS REGIONS OF ARMENIA SUPPORT ARMENIA’S JOINING EUROPEAN UNION

YEREVAN, December 21 (Noyan Tapan). Of the 2,000 people surveyed
in various regions of Armenia, 64% are in favor of the country’s
joining the European Union, the overwhelming majority of them being
convinced that it will take Armenia about 15 years. These are the
results of the survey conducted by the Armenian Center for National and
International Studies (ACNIS). A surevey of 100 experts was conducted
in parallel with this. 92 of the 100 experts were in favor of the
country’s unconditional joining the EU. This data was presented at
the December 21 final seminar-discussion at the ACNIS. According to
Stepan Safarian, an ACNIS expert, the social-economic aspect was the
most attractive aspect of joining the EU for the participants of the
public survey and most of them had hopes of improving their social
position after Armenia’s becomimg a member of this organization, while
the most decisive aspect in the experts’ choice was their aspiration
for an irrevocable establishment of democratic values. The expert
paid attention to a considerable difference in the outcomes of the
public survey and the expert survey with respect to the issue how
much Russia is interested in Armenia’s joining the EU. Thus 50.6%
of the population believes that Russia will contribute to the RA
joining the EU, whereas only 14% of the experts take this view. 60%
of the experts believe that the RF will hinder Arm enia from joining
the EU. The percentage of those with a negative attitude to the US in
this issue is not big: only 16.2% of the participants of the public
survey and 5% of the experts believe that the US will hinder Armenia
from joining the EU. The majority of the experts hold the view that the
US is interested in Armenia’s becoming member of this largest political
and economic union. Among the main foreign political questions that
respondents were asked was the question about their attitude to the
issue of sending Armenian troops to Iraq. According to the survey
results, 67% of the experts and 70.5% of the population were opposed
to this measure. The seminar was attended by represntatives of various
political forces, NGOs, as well as by scientists.

Deutsche Presse-Agentur
December 16, 2004, Thursday
12:27:43 Central European Time

ROUNDUP: E.U. set to okay Turkey entry talks – with conditions

Brussels

European Union leaders are expected to approve opening membership
talks with Turkey at a summit Thursday, but the historic decision
will be tempered with warnings Ankara must meet tough standards and
that negotiations will take over a decade.

“The time to start negotiations with Turkey has come,” said European
Commission President Jose Manuel Barroso, adding that Ankara “must go
the extra mile” and show its allegiance to core European values.

Turkey, which has been seeking to join the European Union (E.U.) for
over 40 years, is expected to be told at the bloc’s two-day summit
that accession talks can begin in the second half of 2005.

But two key sticking points remain, said diplomats.

First, is Turkey’s refusal to grant diplomatic recognition to E.U.
member state Cyprus which despite its non-recognition by Ankara is
still expected to give a green light to opening E.U. talks. The
decision by E.U. leaders must be unanimous.

“What kind of message does it send when you do not recognise all the
members of the club you want to join?” asked Barroso.

The Commission chief said Cyprus was a test of Turkey’s willingness
to “win over the hearts and minds of everyone in Europe.”

E.U. leaders want Turkey to agree to extend a customs union pact with
the bloc to all new E.U. states, including Cyprus, which joined the
Union in May this year.

But Ankara, which only recognises self-styled Turkish northern
Cyprus, has so far refused to do this.

Observers expect the E.U. to fudge the issue at the summit and issue
a declaration saying they welcome “the intention” of Turkey to extend
customs union.

Asked about calls by France for Turkey to recognise the killing of up
to 1.5 million Christian Armenians under the Ottoman Empire in 1915
as a genocide, Barroso said the question would have to be up for
frank discussion.

But he underlined this should take place at a later date and that no
new political terms should be set prior to the start of E.U.
accession negotiations. Turkey rejects the label of genocide with
regard to the Armenians.

The second summit sticking point is what wording will be used to make
clear to Ankara that negotiations will be open-ended and their
successful outcome is not guaranteed.

A senior German official said full membership for Ankara was the E.U.
goal and demands by a minority of member states, led by Austria, for
setting an option of second class membership – a so-called
“privileged partnership” – was not on the cards.

“That issue is dead,” added an E.U. diplomat.

Austria as well as France and Denmark, remain nervous about admitting
a large, poor and mainly Moslem state with 70 million people to what
has until now been a mainly Christian club.

A German opinion poll this week showed just 15 per cent back giving
Turkey full E.U. membership. Turks, numbering 2.4 million, are
Germany’s biggest minority.

“Obviously there are problems with public opinion in some member
states,” admitted Barroso who stressed that final admission for
Turkey would have to come from all 25 E.U. countries.

Given these concerns, E.U. leaders will tell Turkey improvements are
needed to meet the 25-nation bloc’s Copenhagen Criteria which include
standards for human rights, minority protection and rule of law.

Ankara will also be told that further economic reforms are needed as
well as moves to ensure the traditionally strong role of the military
in the country is curbed.

Concern over large numbers of Turkish immigrants flooding into the
E.U. has led the Dutch E.U. presidency to seek giving individual
member states a long-term right to impose controls on the movement of
people.

E.U. member states are not the only ones on edge. Turkish Prime
Minister Recep Tayyip Erdogan has warned in recent days that Turkey
will not accept membership at any cost.

Also on the E.U. summit agenda is a further enlargement issue: the
bloc’s leaders are expected to announce membership talks have been
concluded with Bulgaria and Romania.

But the two countries, which failed to make the grade for the E.U.’s
10 nation expansion last May 1, will be told they still must make
progress in a number of areas including justice and corruption and
that planned accession in 2007 could be delayed until 2008.

The summit is likely to approve opening membership talks with Croatia
in March or April next year conditional on Zagreb’s cooperating with
war crimes trials linked to the conflicts in former Yugoslavia.

Croatia, which could also join by 2008 or 2009, would be the second
former Yugoslav state to become an E.U. member following Slovenia
which joined last May 1. dpa lm si jm