Author: Nargizian David

CSTO MILITARY ALLIANCE ‘COMMITTED TO ARMENIA’S DEFENSE’

Asbarez
ce-%e2%80%98committed-to-armenia%e2%80%99s-defense %e2%80%99/
Aug 6, 2009

YEREVAN (RFE/RL)-Armenia can count on military support from fellow
members of the Collective Security Treaty Organization (CSTO) in case
of a new war with Azerbaijan, the secretary general of the Russian-led
defense alliance indicated on Thursday.

"When it comes to war, one has to understand that the CSTO is
based on the Collective Security Treaty, Article 4 of which says
that an aggression against one of the organization’s member states
is an aggression against all member states," Nikolay Bordyuzha said
during a video conference with Armenian journalists. "We will proceed
from that."

Bordyuzha was responding to a question about what the CSTO would do if
Azerbaijan, which is not a member of the security pact, were to launch
a military campaign against Armenia to win back Nagorno-Karabakh.

The CSTO was set up in the wake of the Soviet collapse and currently
comprises Russia and six other ex-Soviet republics: Armenia, Belarus,
Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Yerevan’s membership
in the alliance reflects its close military ties with Moscow.

Analysts in Yerevan have long doubted that CSTO member states other
than Russia would provide military assistance to Armenia in the event
of renewed war in Karabakh. In fact, some of those states, notably
Kazakhstan, have voted for Karabakh-related resolutions submitted by
Azerbaijan to various international organizations.

"Often times things that are written on paper are not put into
practice," said Tevan Poghosian, chairman of the Armenian Atlantic
Association, which promotes closer ties between Armenia and
NATO. "Since that agreement [mentioned by Bordyuzha] has never been
tested in practice, I wouldn’t put much trust into it."

Bordyuzha noted with satisfaction that international efforts to
settle the Karabakh conflict have made significant progress of late
and could soon yield a breakthrough. "I very much hope that the
efforts of the Minsk Group, which is working very actively today,
and the meetings of the presidents of Armenia and Azerbaijan will
lead to a peaceful resolution of the conflict," he said. "Everything
testifies to that now."

Bordyuzha would not be drawn on the CSTO’s possible involvement in an
international peacekeeping force that would be deployed in the conflict
zone should the warring sides agree on a peace plan proposed by the
French, Russian and U.S. mediators. "The issue of the participation
of peacekeeping forces has never been discussed," he said. "Besides,
I must say that CSTO’s peacekeeping forces are still being formed
and will be ready only by the end of this month."

The Russian official appeared to refer to a NATO-style rapid reaction
force which the CSTO members except Belarus and Uzbekistan agreed
to form in June. The Armenian government has yet to clarify its
contribution to the force officially called the Collective Operational
Reaction Forces (CORF).

IS IT CONFESSION?

LRAGIR.AM
11:29:20 – 06/08/2009

In the official message on the session of the Police collegium taken
place on August 5, a very interesting phrase is present.

"The home political stability of Armenia enabled the police forces to
concentrate on the fulfillment of its constitutional duties, and we
have to state, that it registered tangible results in several spheres".

At fist instance, this may seem a standard formulation, which
is characteristic to official messages. But after an attentive
examination, a very interesting question occurs.

This phrase runs that the Police was enabled to concentrate on its
constitutional duties, as the home political situation was stable. Does
not it mean that in case of home political tension or instability
the Police are enabled to leave the framework of its constitutional
duties? In other words, does not it mean that the Police exceed its
constitutional duties in case of instable moments violating the law?

However, if "stability" enables it to "fulfill what the law provides
for", consequently, instability enables the police do what the law
does not provide for. What else can be considered this phrase in the
official message other than confession?

ARMENIAN BANKS SUFFER AT THE HANDS OF REAL ECONOMY

2009/08/ 05 | 16:28

Economy

The following article appeared in today’s businessnewseurope website.

Armenia has been hit by the crisis, but the blow was not to the nose,
rather it came under the belt: all the problems the banking sector
is suffering have been passed on to them by a slowdown in the real
economy.

"We were lucky not to be as integrated into the international capital
markets as Russia or Kazakhstan," says Tigran Davtyan, deputy executive
director of ConverseBank, who adds wryly that Armenia had been trying
to develop the local capital markets beyond the government securities
one and some corporate bonds, but "luckily, we failed."

The government was fairly optimistic the crisis would pass by Armenia
at the start of the year, predicting a relatively mild contraction
in GDP of 7-8%. So when the Central Bank of Armenia (CBA) was forced
to devalue the dram by 22% at the start of March, followed by a 15%
fall in GDP at the end of the first quarter, the state went into
emergency mode.

The CBA slashed rates and pumped liquidity into the banking system
in the hopes of buoying economic activity.

Interest rates have been cut several times and the repurchase agreement
(repo) deal on government securities has been extended from one week
to up to several months. Now businessmen are a lot more pessimistic
about the prospects for a fast recovery. "Growth was fast in the
last few years and we were growing 10-15% every year for about eight
years, but the growth was already starting to fall in 2008 before the
worst of the crisis hit," says Robert Petrosyan, head of strategy at
Armeconombank (AEB). "Now we are only expecting the strong growth
to resume in 2011," expressing an opinion shared by almost all the
businessmen interviewed for this article.

Still, the worst seems to have past. Economists are predicting that
the economy will only contract by 2% in the third quarter and may be
back in the black by the last quarter in quarter-on-quarter terms. "We
can already see the beneficial effects of these changes in the real
economy," says Davtyan. "The dram is already appreciating."

Sheltered from the storm Thanks to the very conservative policies of
Armenia’s central bank, coupled with the sector’s relative isolation
from the international capital markets, the Armenian banking sector
was sheltered from the worst of the international financial storm.

Today, the level of non-performing loans is relatively low at 6.5%
of total loans, while the average capitalisation of banks is a very
high 25-30% of total assets. "Most of the NPLs are in the real estate
and construction sector, but it has also hit the small and medium-sized
enterprises. In June, the NPLs were 10-11% of the total loan portfolio,
but against this we have a very high [Capital Adequacy Ratio], which
provides a cushion," says ConverseBank. "NPLs could go as high as 20%
before we start to have any real problems in the bank sector."

The upshot is that the sector could bear very high bad debt levels
before any bank would run into a shortage of capital. At the same time,
the CBA reserves of $25bn-30bn is enough to bail out any bank that
gets into problems. "The [International Monetary Fund] and Russia
between them have given Armenia loans of over $1bn, which is a very
large sum for us, and so we are not anticipating any macroeconomic
problems either," says Petrosyan.

The growth of banks like AEB has slowed considerably, but
they are still in profit and see 2009 as a hiccup rather than a
disaster. Armenian banks find themselves in a frustrating position now:
they have the liquidity to make loans, but they can’t find anyone to
lend to. "This year is a write-off, but there is some optimism that
the economy will start growing next year. Still, there could be a ‘W’
style crisis this autumn, but if that happens, it will be mild. By
2011, everyone is pretty sure we will return to strong growth as we
saw before 2007, with some differences as the system has changed,"
says Petrosyan

Amongst the most painful changes was the popping of a bubble on the
real estate market and prices aren’t expected to return to their
previous levels any time soon. However, the damage was limited by
the CBA’s tight regulation and the almost complete lack of exposure
of the bank sector to the international capital markets.

"We are not afraid of capital flight, as the Armenian banking sector
is a closed system so there were no speculative capital inflows to
leave again. Foreign investment is not big here and what there is
tends to be direct investment," says Dr Konstantin Saroyan, member
of the board responsible for development at ArmSwissbank.

What capital flight there has been was internal, as residents switched
their deposits from dram-denominated to dollar- or euro-dominated
ones, which led to the devaluation. However, the switch of currencies
has put the banks in a difficult position as they rely heavily on
deposits to fund credits; with the volume of drams draining out of
their coffers, the banks were squeezed and so credit volumes fell,
but not catastrophically.

"The volumes of credits were reduced but the banks still have liquidity
and they want to lend," says Agricol bank. "NPLs are up a little in
the sector, but not at our bank. The problems are not really in the
bank sector, but in the real economy. This is a psychological crisis
in Armenia more than anything else."

Journal of Turkish Weekly
Aug 1 2009

Azerbaijan Should Adhere To Principled Strategic Line In
Nagorno-karabakh Talks: Expert Of Carleton University

Saturday, 1 August 2009

The United States, Washington, Aug. 1 /Trend News, N.Bogdanova/

Azerbaijan should adhere to the principled strategic line to
peacefully resolve the Nagorno-Karabakh conflict, leading Expert on
Eurasian countries, Doctor Robert Cutler believes.

"In the peace process on Nagorno-Karabakh conflict Azerbaijan should
continue the principled strategic line that it has followed up until
this time," Senior Research Fellow in the Institute of European,
Russian and Eurasian Studies, Carleton University of Canada, Doctor
Cutler said in his interview with Trend News.

Continuing a previous line, Azerbaijan should make tactical
compromises in its interest in particular negotiating situations as
they arise, he added.

Official Baku insists on settlement of the Nagorno-Karabakh conflict
on the base of Azerbaijan’s territorial integrity.

Commenting on the OSCE Minsk Group statements about the withdrawal of
the snipers from the frontline of the conflict, expert said that, it
would be effective only if Armenian side stops the regular shooting on
Azerbaijan’s territory.

"If armed militia from occupied territories have indeed stopped
sniping at Azerbaijani soldiers with rifles, then it would be good for
Azerbaijan also to stop sniping at occupying forces," he said.

Although a ceasefire regime exists between Azerbaijan and Armenia
since 1994, both sides periodically fires on the front line.

Reminding that there is a possibility that Nagorno-Karabakh conflict
will be discussed at the UN GA’s 64th session, Dr. Robert M.Cutler
nonetheless says that "The UN has not lately been able to make a
constructive contribution to the solution of frozen conflicts in the
Caucasus. This is not necessarily the UN’s fault but just a fact of
life".

The conflict between the two South Caucasus countries began in 1988
when Armenia made territorial claims against Azerbaijan. Armenian
armed forces have occupied 20 percent of Azerbaijan since 1992,
including the Nagorno-Karabakh region and 7 surrounding
districts. Azerbaijan and Armenia signed a ceasefire agreement in
1994. The co-chairs of the OSCE Minsk Group – Russia, France, and the
U.S. – are currently holding the peace negotiations.

Saturday, 1 August 2009
Trend News Agency

zerbaijan-should-adhere-to-principled-strategic-li ne-in-nagorno-karabakh-talks-expert-of-carleton-un iversity.html

PRESIDENT SERZH SARGSYAN MADE A REGULAR WORKING VISIT TO THE MINISTRY OF DEFENSE

p;p=0&id=938&y=2009&m=07&d=31
31.0 7.09

After the official ceremony dedicated to the 15th anniversary
of the establishment of the Vazgen Sarkissian Military Academy
and commencement ceremony for the graduates 2009 of the military
training institutions, President Serzh Sargsyan made a regular
working visit to the Ministry of Defense. At the Ministry of Defense
the Commander-in-Chief received reports from a number of the high
ranking military staff and gave corresponding instructions.

SARKISYAN WANTS "REAL STEPS" FROM ANKARA TO OPEN THE TURKISH BORDER

TurkishNY
rkisyan-wants-qreal-stepsq-from-ankara-to-open-the -turkish-border.html
July 29 2009

Armenian President Serge Sarkisian said Tuesday he would only agree
to attend a football match in neighboring Turkey if Ankara takes
"real steps" to open their border.

Sarkisian was invited to the return leg of the World Cup qualifying tie
between Turkey and Armenia on Oct.14 when Turkish President Abdullah
Gul was in Yerevan last year to attend the first leg.

"I will only accept this invitation if previously made agreements are
fulfilled, if there are real steps. I will visit Turkey if we have
re-opened the borders and if we are on the verge of an end to the
blockade," Sarkisian was quoted by AFP as saying at a press conference
in Yerevan with Serbian President Boris Tadic.

"We expect that we will soon see constructive steps our [Turkish]
colleagues will make to create the conditions for the Armenian
president’s visit," Tadic said.

Ankara cut diplomatic links with Yerevan and closed the border in
a show of support to Azerbaijan in 1993 after 20 percent of its
territory was invaded by Armenia in the disputed region – a frozen
conflict legacy of the Soviet Union known as Nagorno-Karabakh.

Ankara and Yerevan, however, have been engaged in a normalization
process, including the reopening of the border, since Gul’s landmark
visit to Armenia as the first Turkish leader to visit the neighboring
country.

The two countries agreed in April on a "road map" deal for normalizing
ties after months of U.S.-backed talks, but there have been few signs
of progress since the announcement.

Turkey has said it will not open its border with Armenia before
the neighboring country ends its occupation of the disputed
Nagorno-Karabakh region.

Negotiations on Nagorno-Karabakh have been continuing since a
cease-fire in 1994. International mediators have said repeatedly
in recent months that they are close to a breakthrough, but there
is little sign of when it might come or whether an agreement can be
implemented on the ground.

A FORUM OF ARMENIAN-FRENCH ASTROLOGISTS IS TO TAKE PLACE IN BYURAKAN

ARMENPRESS
July 24, 2009

YEREVAN, JULY 24, ARMENPRESS: A forum of Armenian and French
astrologists is to take place September 21-25 in Byurakan Observatory
after Victor Hambartsumyan.

Director of the Byurakan Observatory Hayk Harutyunyan told Armenpress
that at the meeting issues on development of astrology in Armenia
and cooperation with French observatories will be discussed.

5 astrologists arrived from France, will present achievements in
astronomy of their country, as well as the events organized in
France within the frames of the "International Astrology Year" and
their results.

UNESCO has declared 2009 as an International Astrology Year, which
aims to make astrology available to different sections of society.

ADB INTERESTED IN DEVELOPING LONG-TERM PARTNERSHIP RELATIONS WITH ARMENIA

armradio.am
23.07.2009 16:18

President Serzh Sargsyan today received the Vice President of the
Asian Development Bank Xiaoyu Zhao and his delegation.

The President of the Republic hailed the dynamically developing
cooperation with the Asian Development Bank. President Sargsyan
welcomed the interest of the Bank in large-scale programs like the
construction of the North-South highway and the North-South railway, as
well as the programs of development of urban transport infrastructure.

President Sargsyan expressed gratitude for the $80 mln assistance to
Armenia to mitigate the consequences of the global financial-economic
crisis and accomplish the programs envisaged.

ADB Vice President Xiaoyu Zhao said the Bank is interested in the
development of long-term partnership relations with Armenia.

Appreciating the cooperation established between the Bank and the
Armenian Government, the Vice President assured that the ADB is willing
to continue assisting Armenia with overcoming the difficulties caused
by the global crisis.

Attaching importance to the implementation of the large-scale
infrastructure programs, the parties agreed that those present a
serious impetus for the development of the country.

President Sargsyan attached importance to the cooperation with
financial structures from the perspective that they bring new
experience and culture to Armenia.

CENTRAL BANK OF ARMENIA REGISTERS NEW YEREVAN BRANCH OF ARMBUSINESSBANK

ArmInfo
2009-07-23 16:19:00

ArmInfo. The Central Bank of Armenia has registered a new Yerevan
branch of ArmBusinessBank – Noragavit, reports the press service of
the CB.

Now ArmBusinessBanmk has 21 branches: 10 in Yerevan, 5 in regions
and 6 in Nagorno-Karabakh Republic. The key shareholders of ABB
are Ukrprombank (35%), Alfa-Garant (35%) and Chrystie Management
Inc. (30%).

AZERBAIJAN PREPARING FOR WAR WITH ARMENIA – EX-MINISTER OF NAGORNO- KARABAKH

Interfax
July 22 2009
Russia

Azerbaijan is preparing for a war with Armenia, Samvel Babayan, former
defense minister of the self- proclaimed republic of Nagorno-Karabakh,
told journalists on Wednesday.

"I see that Azerbaijan is getting ready for a war. We need to be
ready for it," Babayan said.

"A situation where Azerbaijan is purchasing a larger amount of military
hardware and its counterintelligence agents are studying the Armenian
language means that they are preparing for a war," he said.

"Azerbaijan has no obligations that could stop it from starting a
war. Azerbaijan will be defeated, should hostilities be resumed. It
is absolutely clear," the former minister said.

The authorities in Baku lost control over Nagorno-Karabakh and seven
neighboring districts during a bloody conflict between Azerbaijan and
Armenia in the 1990s. As a result of the conflict, up to one million
Azeri people had to leave their homes. The UN Security Council adopted
resolutions denouncing the occupation of the Azeri territories and
ordering Armenia’s armed forces to leave the region.

The OSCE Minsk Group, which includes representative of the U.S.,
Russia and France, has been working to help Armenia and Azerbaijan
find a solution to the conflict.

A ceasefire agreement between Azerbaijan and Armenia came into force
in May 1994. The OSCE has been regularly monitoring the parties’
contact lines.