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  • armenia now - 01/09/2009

    ARMENIANOW.COM
    Administration Address: 26 Parpetsi St., No 9
    Phone: +(374 1) 532422
    Email: [email protected]
    Internet: www.armenianow.com
    Technical Assistance: (For technical assistance please contact Babken
    Juharyan)
    Email: [email protected]

    *************************** **************************************************
    January 9, 2009,

    1. Facing the Storm: Is Armenia ready for financial fallout?

    2. Globalization in the Storefront: At least 10 "legitimate"
    franchises entered Yerevan in 2008

    3. Karabakh Borders: De jure, de facto, de TV

    4. Frozen conflict, unfrozen issue: Red Cross launches project on
    finding the missing of Nagorno Karabakh war

    5. "Sorry" Seems to Be the Hardest Word: Turkish elites agonize
    over apology campaign

    6. Cash Still King: Paying bills by machine and without queues
    remains a novel idea in Armenia

    7. Art and Purpose: Family Care foundation school teaches beauty
    and business


    8. Hot line: A new center in Vanadzor prompts citizens to report
    corruption cases


    ****************************************** **********************************
    1. FACING THE STORM: IS ARMENIA READY FOR FINANCIAL FALLOUT?

    Richard Giragosian

    Already weakened by a continuing domestic political crisis of
    confidence, the Armenian government is facing a new challenge as the
    global financial and economic crisis threatens to destabilize
    Armenia's economy. The vulnerability of the Armenian economy, despite
    the cushion of closed borders and limited links to the broader global
    economy, is rooted in its inherent structural fragility.

    This structural fragility is composed of three elements: a dangerous
    dependence on the influx of remittances, or money from Armenians
    working abroad, a weak and declining economy that is supported by the
    superficial dominance of the country's service, commodity and
    construction sectors, and, most distressing, a closed oligarchic
    economic network centered on several commodity-based cartels or
    monopolies.

    But even more troubling is the Armenian government's rather
    short-sighted refusal to even recognize the country's vulnerability to
    the global economic crisis. Although government officials admit that
    economic activity has already contracted considerably, they have
    tended to downplay the significance of the downturn in construction
    and the shortfall in the amount of remittance flows, the latter
    providing an essential cash influx for most Armenians.

    Such unfounded optimism was most recent expressed by Armenian Prime
    Minister Tigran Sarkisian, whose recent year-end press interviews
    reflected his desire to deflect criticism and reassure an already
    worried public.

    According to the prime minister, the Armenian government plans to
    embark on large projects involving an "aggressive spending policy by
    the state" to "neutralize" the impact of the global economic crisis by
    creating jobs and proving expanded credit to small- and medium-sized
    businesses.

    Sarkisian asserted that the planned increase in public spending on
    road and housing construction, which is to include some $250 million
    for infrastructure projects in the earthquake damaged areas of
    northern Armenia, will create more than 5,000 new jobs. In addition,
    the government also plans to seek some $250 million in new loans from
    the World Bank for the planned expansion of business credit.

    Sarkisian also noted that Armenia would need more than $1 billion in
    additional foreign funding to finance the construction of a new
    nuclear power plant to replace the aging, Soviet-era Medzamor plant,
    and for the planned railway link to Iran. But in the wake of a global
    credit crunch, with lenders much more reluctant to take on such new
    financing, it remains unclear from where Armenia can obtain such
    foreign assistance.

    Echoing the prime minister's optimism, Armenian Economy Minister
    Nerses Yeritsyan argued that "Armenia overcame the first wave" of the
    global financial-economic crisis because Armenia's banking system
    remained untouched by the financial crisis and free from global risk.
    He added that the Armenian government was taking "every measure to
    over come the negative impacts of the crisis."

    For his part, Finance Minister Tigran Davitian dismissed worries about
    a subsequent reduction in the amount of tax revenue, arguing that the
    "economic crisis has not affected tax collection in Armenia as yet."
    Nevertheless, the Armenian government needs a minimum 20 percent
    increase in tax collection simply to meet the recently adopted 2009
    state budget. With an over-reliance on the value-added tax (VAT) as
    the single largest source of budgetary revenue in the country, there
    is a real danger that the state will be unable to meet its revenue
    targets, especially given recent promises of a 40 percent rise in
    salaries for customs and tax officials.

    Despite these official claims, the Armenian public remains concerned,
    however. As a recent public opinion survey conducted by the Armenian
    Marketing Association revealed, some 47 percent of those polled felt
    that the economic crisis will impact Armenia, with 43 percent
    believing that the impact will financially harm their families.

    Mounting Job Losses

    The most significant demonstration of Armenia's vulnerability to the
    global economic crisis has been in the sudden closure of several key
    firms. Tied to the related downturn in global commodity markets, the
    recent decline in prices for non-ferrous metals, Armenia's number one
    export item, has sparked the loss of several hundred mining jobs and
    the suspension of operations at Armenia's two largest chemical
    enterprises, including the Nairit plant, which has forced almost three
    thousand workers to be abruptly laid off.

    In addition to the job losses from these closures, the budget
    implications are also serious. For example, one of the largest mining
    companies to downscale operations was the German-owned Zangezur Copper
    and Molybdenum Plant, which is one of Armenia's leading corporate
    taxpayers. According to the company's chief executive, Maxim
    Hakobian, the firm now projects a 20 percent cut in its contributions
    to the state budget in 2009.

    The Link between Armenian Politics & Economics

    Just as there are serious political repercussions to the impact of the
    global economic crisis on Armenia, political considerations have also
    played a role in the Armenian government's handling of its economic
    reform program.

    For one of the more obvious examples, the closure of several Armenian
    businesses by tax officials was linked more to their owner's political
    activities than to any overt tax violations. The inspection and
    subsequent closure of the Bjni mineral water company, owned by
    millionaire businessman Khachatur Sukiasian, an open supporter of the
    opposition, raised questions over the government's arbitrary use of
    the law, seemingly used more to punish than to regulate business
    activity. The rare decision to close and auction the company for
    allegedly engaging in tax evasion was additionally dubious due to the
    obvious discrepancies with other even more notorious business
    interests owned by other wealthy "businessmen" with openly close ties
    to the government.

    The closure of the Bjni bottling, one of the country's largest such
    enterprises, also deals a serious blow to the local economy. Located
    in Charentsavan, a generally impoverished and unemployment-ridden town
    outside of Yerevan, the decision now threatens the livelihood of more
    than 400 local employees.

    Two other Sukiasian-owned firms, elements of his larger SIL Group,
    were also targeted by the authorities, as the executives of both a
    pizza restaurant chain and a printing house were arrested on tax
    evasion charges. A third Sukiasian-owned firm, which held the
    exclusive distribution rights for Phillip Morris cigarettes in
    Armenia, was also forced out of business in 2008 after state customs
    officials reportedly held up several large shipments of its imported
    products.

    The linkage between Armenia's domestic political instability and
    economics was further demonstrated by the decision last month by the
    U.S. Millennium Challenge Corporation (MCC) to maintain its suspension
    of $236.5 million in economic assistance on the grounds that the
    Armenian government has failed to address its concerns about "the
    status of democratic governance" in the country. The decision
    followed a similar move in May 2008, when the latest installment in
    the five-year Millennium Challenge Account (MCA) program was frozen in
    the wake of Armenia's post-election political crisis.

    The most recent suspension was justified by the U.S. because of
    "concerns" and unmet "expectations that the government of Armenia
    fulfill commitments to implement substantive reforms." Commenting on
    the freeze, U.S. Deputy Assistant Secretary of State Matthew Bryza
    noted last month that Washington was "seriously worried" about the
    continuing imprisonment of dozens of opposition members arrested
    during the post-election crisis.

    A Worrisome Prognosis

    Beyond the limited parameters of the Armenian government's optimism
    and public apprehension, a recent report by a leading diaspora group
    has highlighted the dangers of the implications of the global crisis
    for Armenia. In a report issued last month (available online at:
    www.pf-armenia.org), the "Policy Forum Armenia" group warned that "the
    ongoing financial crisis will have a deep and prolonged impact on a
    wide range of economies" and noted that such a negative impact would
    "also likely to be true for a peripheral economy like Armenia's,
    regardless of how isolated its relevant sectors are from the rest of
    the world."

    As an independent professional non-profit association, the Policy
    Forum Armenia group seeks to "strengthen discourse on Armenia's
    economic development and national security and through that helping to
    shape public policy," with a main objective of offering "alternative
    views and professional analysis containing innovative and practical
    recommendations for public policy design and implementation."

    The Policy Forum Armenia report confirmed that "there is ample
    evidence of a serious crisis in the making," and added that "in this
    context, Armenia's economy is likely to be significantly affected."

    The report provided a set of several policy recommendations, going
    well beyond the limited scope of the Armenian government's seemingly
    inadequate preparations and reflecting a more realistic recognition of
    the need to take action now to better protect the Armenian economy for
    the most severe effects of the economic crisis.

    The report adds new policy recommendations that have been
    disappointingly absent from public policy debate to date. And in this
    light, the Armenian government should, most of all. incorporate the
    report's call for an enhanced and expanded "social safety net" through
    the adoption of measures to review poverty guidelines, targeting the
    next layer of the country's socially vulnerable strata of population,
    taking "credible steps" in eliminating corruption, and enhancing
    existing unemployment insurance and providing assistance to employees
    that have lost jobs due to crisis-related closures and downsizings."

    ****************************** **********************************************
    2. GLOBALIZATION IN THE STOREFRONT: AT LEAST 10 "LEGITIMATE"
    FRANCHISES ENTERED YEREVAN IN 2008

    Sara Khojoyan
    ArmeniaNow reporter

    When New Year fever shoppers hit Yerevan streets this recent holiday
    season they found that more than 10 "brand name" shops now fill the
    consumer menu as internationally-recognized names replace nameless or
    meaningless storefronts. Brightly decorated and designed window
    casings continue to displace the gloomy and usually unattractive
    holdovers from a bygone era.

    The opening of world known brand outlets in Armenia has increased the
    confidence among people about the availability of clothing for
    consumers with average and high purchasing capacity. But the
    increasing appearance of notable names hardly discourages skepticism
    over whether the product inside matches the reliability of the name on
    the door. That is to say: Still in Yerevan, just because a store
    appears to be a franchise, that doesn't mean it is legitimate.

    A few years ago, for example, a shop opened claiming to be "IKEA". It
    was later revealed that the store was not a legitimate franchise and
    soon the name changed to "IDEA". And, more recently, a shop has opened
    calling itself "The Disney Store" on its marquee, however, in
    television promotion more quietly refers to itself as "The 'D' Store".

    Legitimate franchises new to the streets, however, include MaxMara,
    Max&Co, Mexx, Motivi, Next, Stefano Ricci and others. These companies
    are represented in Armenia through franchising that gives a number of
    advantages to both the shop-owners and the consumers in Armenia.

    "Armenians in Yerevan can get the same clothes, as say, the British in
    London. And, then, everything in this shop - the floor, the furniture,
    the jars, are all the way they are in any of the Next shop around the
    world," says Vahe Gemilyan, the director of the recently opened Next
    shop, which moved into space previously held by Slavyanskaya
    restaurant.

    Naira Shahnazaryan, director of the Benetton shop operating by
    franchise contract in Armenia says the increase in the number of
    unibrand shops in Yerevan will result in the close up of multi-brand
    ones.

    "The franchising makes our work easier, as we get financing for
    advertisement. They tell us even the way the shop windows should look.
    For instance, the New Year window of Benetton is like any Benetton
    shop's around the world," mentions Shahnazaryan.

    The franchising - a novice method of doing business [in Armenia] -
    implies the owner of the company allows another business to use his
    brand on certain conditions passing on his technologies of running it.

    The majority of franchising contracts in Armenia relate to the imports
    and sells of garments. The franchiser defines the design of the shop,
    the size of discounts and the dates [for the discounts], and also sets
    the standards of quality for delivering the service. Franchisees in
    Armenia are Mango, Stefanel, Orchestra, Cop.Copine, Olsen, Nugat, and
    other shops.

    In November 2008 the American Trade Chamber in Armenia organized a
    conference on Franchising in Armenia to propagate franchising
    ideologies in Armenia.

    "We can see movement mostly in franchising for imports and sells of
    outfit and hotel businesses. We have quite a serious work to do in the
    sphere of food products to manage to present new brands," mentions the
    chairman of the American Chamber of Commerce in Armenia Davit
    Atanesyan.

    Atanesyan says the legislative conditions for organizing franchising
    activities in Armenia are perfect, though: "The law protects the brand
    but there are many problems with implementation.

    Directors of a number of brand shops underline some shops get clothes
    of previous seasons for discount prices abroad and sell them for lower
    prices than in the brand shop.

    Gayane Zakaryan, director at the French Orchestra children's store
    says they have the exclusive right to use the brand in the territory
    of Armenia: "But the nimble traders at out bazaars manage to get the
    goods for lower prices at the warehouses in Turkey and sell at the
    bazaars."

    Nerses Yeritsyan, RA Minister of Economy says development of
    franchising is essential for Armenia.

    "Its very important the idea of franchising spreads in our society. If
    we lack the know-how internally, then we need to import it from
    abroad. Franchising is the first serious and important step in that
    regard. No less important is spreading the successful business all
    over the country," the minister mentioned at the conference of the
    American Chamber of Commerce in Armenia.

    And while the number of new stores and their branches in Yerevan
    grows, store managers, like the majority of businesspeople in the
    world, worry of the possible consequences of the world financial
    crisis on the volume of trades.

    The representative of the Sela store that opened a couple of years ago
    in Yerevan, said they are concerned with the crisis like anyone else:
    "But we will try not to lose our customers, we will do our best - by
    means of actions or other events, to try to stay within the focus of
    our clients' attention."

    Gemilyan, manager of the Next store said they have developed a special
    strategy to gain customers and make them loyal to the brand:

    "We are very careful about every customer; we have even softened our
    price policy to have every shopper find something for himself/herself
    here."

    Some stores though do not think of the influence the financial crisis
    may have, yet. Ruzanna Barseghyan, Basic House store manager, a brand
    that has recently opened a new branch in the center of the capital,
    said they already have their clients and have no worries in this
    regard. "What regards the financial crisis, it has not touched upon us
    yet and we have not thought about it yet."

    With import of franchises, also comes import of foreign prices. "There
    are people who go to Europe and buy goods of past seasons at 70-80
    percent discount and say after they return the prices there are
    lower," says procurement manager of the company representing Betty
    Barclay, MaxMara and Max&Co, Tatevik Stepanyan. "I can tell for us,
    the difference in price as compared to Europe is very small.
    Everything should be viewed in comparison: there are things that are
    10 percent more expensive here and things that are 10 percent more
    expensive there."
    ************************************* ***************************************
    3. KARABAKH BORDERS: DE JURE, DE FACTO, DE TV

    Naira Hairumyan
    ArmeniaNow Karabakh reporter

    In December of 2008 representatives of Karabakh's youth organizations
    sent a letter to Armenian president Serjh Sargsyan asking him to use
    his influence to have "weather forecasts" on Armenian TV channels quit
    using maps in which Armenia and Karabakh are shown within the borders
    they had in 1988. On these maps Nagorno Karabakh is presented within
    the borders of former Autonomous Region of Nagorno Karabakh (ARNK, as
    a part of Azerbaijani SSR) and Lachin corridor (connecting Armenia and
    NKR) isn't there at all.

    For 20 years Karabakh has had no connection to Azerbaijan, has been
    building an independent - if unrecognized - statehood, establishing
    interstate relations with Armenia, meanwhile Armenia hasn't decided
    yet whether or not to recognize Karabakh's independence.

    Despite the letter being actively circulated on the Internet, Armenian
    TV channels, however, did not pay much attention to it (except for
    Yerkir Media TV). Being unable to decide which map to use in their
    weather forecast programs and in order to avoid any complications on
    border issues they keep using the 1988 map as if the last 20 years
    have not existed at all.

    Does the government have a unanimous standpoint and conception on the
    Karabakh issue settlement? On December 3, Heritage faction deputy
    Larisa Alaverdyan raised the issue in the parliament of Armenia, to
    which Prime-Minister Tigran Sargsyan responded by admitting that such
    a problem does exist. Alaverdyan pointed out that during weather
    forecast Armenian TV channels demonstrate a map on which there is no
    linking line between Armenia and Karabakh, and Karabakh is shown
    within the borders of former ARNK. Alaverdyan stated that it's not
    simply a distortion of reality, but also a violation of NKR
    Constitution and legislation, according to which NKR sovereignty
    applies to its current administrative territory.

    The letter by NKR youth organizations says that "the war crossed out
    artificial and unviable borders of ARNK forced upon the Armenian
    people", and that "the NKR Constitution adopted as a result of the
    referendum held in 2006, consolidated sovereign borders of the
    Armenian land liberated at the cost of blood of the best sons of our
    nation".

    "The fact of ignoring one way or another -be it ideologically or in
    real politics- the victory of the Armenian nation and its results not
    only disregards the memory of fallen heroes, but also encourages a new
    armed aggression against the Armenian statehood," says the letter.

    A few days later a number of Armenian NGOs and individuals joined the
    statement of youth organizations by sending an open letter to the
    heads of Armenian mass media.

    The authors of the letter state that 14 years after calling a truce a
    peculiar situation has formed: the objective reality of including
    those regions into NKR, which once were a part of Azerbaijani SSR, is
    not anyhow reflected in Armenian mass media, commercials or brochures.
    NKR is either absent from maps or is shown within the borders of
    former ARNK.

    "Such maps are a violation of Article 142 of NKR Constitution
    according to which 'until the integrity of the state territory of the
    Republic of Nagorno Karabakh is restored and borders are precisely
    defined public authority is implemented on the territory which is de
    facto under the jurisdiction of the Republic of Nagorno Karabakh' ,"
    quotes the letter.

    The letter further calls upon mass media not to avoid showing the
    acting real borders, actively cover life on the liberated lands and
    inform citizens of Armenia about the strategic role of those lands
    (the letter had 62 signatures).

    The issue of maps has been important since the very beginning of the
    Karabakh conflict, and ever since Internet came along it has become
    urgent. Armenian websites demonstrate a surprising tolerance by
    posting maps where Karabakh is a part of Azerbaijan. On brochure maps
    produced by many tourism agencies printed in Armenia the borders of
    Karabakh do not match today's reality.

    Meanwhile, maps and catalogues produced abroad are more accurate, so
    much that Azerbaijan is putting up a struggle against them. Day.az
    site posted a list of travel SIM cards on which Karabakh is shown as a
    part of Armenia or as a separate country. Those are: GSM-Travel,
    SIMTRAVEL, Travel International SIM Card, produced by In Touch
    company, Smart cards (USA), travel SIM cards produced by
    telecommunication company Oneroam (Great Britain), GO-SIM' cards,
    GLOBALSIM cards, produced by HBSGlobal and many others; the list was a
    full 5 pages long.

    So the situation arises in which Azerbaijani channels in their daily
    weather forecast speak about Karabakh as their inseparable part, and
    Armenian channels, by default, confirm.
    ***************************************** ***********************************
    4. FROZEN CONFLICT, UNFROZEN ISSUE: RED CROSS LAUNCHES PROJECT ON
    FINDING THE MISSING OF NAGORNO KARABAKH WAR

    Marina Grigoryan
    ArmeniaNow reporter

    Almost fifteen years after calling a truce between Karabakh and
    Azerbaijan, the International Committee of Red Cross (ICRC) is
    planning to implement a project aimed at finding out what happened to
    thousands of missing people.

    According to ICRC data, the total number of people missing in the zone
    of the Karabakh conflict (both Azeri and Armenians) is from 4-5,000,
    the overwhelming majority of whom are servicemen.

    James Reynolds, head of IRCR delegation in Armenia, says that
    considering the time factor here, most of them are probably dead by
    now.

    "The project will enable us to draw a more precise and wide picture,
    first of all, concerning the list of the missing about which [the
    list] we already have certain information; it'll also help us to
    obtain new information," Reynolds told ArmeniaNow.

    In 2008, IRCR signed a framework agreement with state commissions on
    the issues of Armenia's, Azerbaijan's and Nagorno Karabakh's war
    prisoners, hostages and the missing. The agreement is envisaged to
    regulate the search process of people's fates who went missing during
    the conflict years.

    According to that agreement, all records- among which there are
    photos, description of the physical appearance of the missing,
    description of what s/he was wearing or things s/he had right before
    going missing- will be handed to the authorities for further
    assistance in the identification process.

    Larisa Alaverdyan, RA National Assembly deputy, member of Heritage
    faction, who has been involved on an expert level in the issues of
    hostages, war prisoners and the missing for many years, welcomes the
    launch of the project, although she says that it should have started
    much earlier.
    "I am convinced that before Azerbaijan has been hindering that
    process. The Armenian side has offered to start the process many
    times. For example, in 2004, at an international conference in Geneva
    devoted to the issue of the missing, I proposed signing an agreement
    between Armenian and Azerbaijan at the end of the conference, on the
    beginning of the search process of the missing. However, the
    representative of Azerbaijan declared that he did not have such
    authority. During the following years we never received an adequate
    reaction from Baku," says Alaverdyan, who became Armenia's first Human
    Rights Defender (Ombudsman) in late February of 2004.
    According to the list by Fund "Against Violation of Law" NGO
    (Alaverdyan was the Executive Director), about 1,000 Armenians are
    missing.
    "The difference in the numbers of the missing Armenians and Azeries
    first of all reflects the total correlation of forces involved in the
    hostilities," says Alaverdyan. "Besides that, there are many evidences
    proving that after a certain battle was over Armenian field commanders
    turned to the Azeris asking to take the bodies off the battlefield in
    accordance with the Geneva convention. However, Azeri commanders did
    not do that. Instead they would declare the dead soldiers and officers
    as missing and captive, later (I can say even until now) using them
    for political speculation."
    Alaverdyan thinks that as a result of such approach there are many
    nameless places of mass burial and that is why an identification
    process of the buried remnants "isn't in Azerbaijan's best interest."
    Data collection and recording within the project framework has already
    started. As Reynolds says, the work is hard from a psychological point
    of view, since ICRC representatives are dealing with people who,
    during many years, have not received any news about their family
    members. They are forced to stir up those people's memories making
    them mentally return to the long gone days over and over again.

    An appeal from a missing person's family member served as a ground to
    ICRC for starting the search. Even if a corresponding state commission
    informs about an episode in the course of which people went missing,
    the incident is not recorded and a case isn't filed without an
    appropriate conversation with family members.

    "Period of limitation is not essential to us. I can say that until now
    we come across cases of searching people who have been missing since
    the World War II, Vietnam war, etc. We hope that during our project in
    the process of interviews with relatives new details can come up about
    already registered cases," Reynolds says.

    As for exhumation of remnants buried in the conflict zone- which is
    one of the search mechanisms- Reynolds says the process hasn't started
    yet.

    "We have to take into account that on top of all other factors,
    exhumation is difficult in technical terms as well. There are also
    issues of ethical and legal character, for example in regard of
    digging mass graves or exhumation of citizens of other countries,
    which will be inevitable in our case."

    ************************************* ***************************************
    5. "SORRY" SEEMS TO BE THE HARDEST WORD: TURKISH ELITES AGONIZE OVER
    APOLOGY CAMPAIGN


    A Commentary by Jirair Haratunian
    Trustee, Armenian Assembly of America
    www.aaainc.org


    For the past few weeks Turkey has been agonizing over an internet
    petition initiated by a group of Turkish intellectuals apologizing for
    the 1915 "Great Catastrophe" that befell the Armenian population in
    Anatolia. The campaign ignited a counter movement led by former
    Turkish ambassadors and a sharp rebuke by Prime Minister Recep Tayyip
    Erdogan. The Prime Minister said, "If there was a crime let those who
    committed it apologize. My nation, my country has no such issue."

    Curiously, President Abdullah Gul initially characterized the petition
    as evidence that Turkey is committed to the democratic principle of
    free expression, but on January 1, after much criticism for his
    passive reaction to the apology campaign, he confessed that it was not
    helpful in the process of negotiations with Armenia.

    Remarkably, the latest reports say that 26,000 signatories have
    registered their personal apology to the internet petition, and the
    Turkish media has headlined the campaign as a major news story for
    weeks. They also gave wide coverage to the Armenian Assembly of
    America statement quoting its Executive Director, Bryan Ardouny, who
    said, "An irreversible trend has commenced in Turkey. This public
    apology is a first step in that direction and will inevitably lead
    Turkey in coming to grips with its genocidal past."

    The petition's authors carefully avoided using the "Genocide" label in
    their apology statement. Instead they called the horrors of 1915 "The
    Great Catastrophe," a term that in Armenian is called "Medz Yeghern."
    This was widely used by Armenians before Raphael Lemkin coined the
    word genocide. The petition also avoided asking the Turkish state to
    recognize the Armenian Genocide in any way. The campaign, the authors
    asserted, is a means for Turks to personally apologize for the horrors
    Armenians endured at the hands of the Ottoman regime.

    The opposition arguments range from denial of any crimes against
    Armenians to the comparison of equivalent losses suffered by Turks at
    the hands of Armenian insurgents. They also recalled the
    assassination of Turkish diplomats by Armenian terrorists in the
    1970s.

    A most interesting phenomenon in Turkey took place on the 32nd day of
    the apology petition when the Turkish State Television network
    broadcast a debate between three advocates and three retired
    ambassadors who opposed the petition.

    The moderator opened the debate noting its objectives. He said, "At
    the root of the issue lies what happened to the Armenians in 1915: was
    it a catastrophe, genocide, or deportation? Should we apologize? To
    whom and for what should we apologize?"

    One of the authors of the apology petition, Dr. Cengiz Aktar,
    explained, "We apologized for not being able to talk about this for
    many years. We also apologize for not being able to share the pain of
    our Armenian brothers and sisters to a sufficient extent."

    In response, former Ambassador Sukru Elekdag said, in part, "First
    they are referring to 'The Great Catastrophe' which is a synonym for
    genocide." He complained that the petitioners were only telling part
    of the story. "There was a deportation decision of course, but this
    was done in legitimate self defense during conditions of war. The
    Russian army was advancing and Armenians took up arms and joined that
    army."

    The moderator asked whether the apology petition makes a positive
    contribution to solving the difficult issues between Turkey and
    Armenia. Elekdag replied, "This campaign cannot serve a useful
    purpose." He noted that secret negotiations exist between Ankara and
    Yerevan and that the Turkish proposal for a joint historic commission
    to examine the history of the period was part of the negotiations.

    Opponents also declared that the petition strengthens the Armenian
    position on the issue in international quarters where the Armenian
    Diaspora campaigns for international recognition of genocide.

    Dr. Aktar made a passionate defense of the petition. He said that the
    petition involved individual and personal apologies and does not
    address itself to either the Armenian or Turkish governments. He said
    responses from Armenians were positive. "They are giving a positive
    response with tears in their eyes because they are finally seeing a
    compassionate response after 90 years."

    He also addressed the assertions that it was only deportation that was
    sanctioned by the Ottoman government. He said, "The truth of the
    matter is that the deportations were one of the biggest calamities
    that ever happened in Anatolia. The Anatolian economy collapsed
    because of this irrational decision, and from that time until today
    the economy has not been revived in eastern Anatolia."

    This television debate was a watershed event in Turkey. It
    illuminated the differing sides of the genocide issue at a time when
    Ankara has indicated an interest in changing its rigid policy towards
    Armenia. It is a step away from past positions that sought to isolate
    Armenia politically and economically. Instead, despite opposition
    from Azerbaijan, Turkey has offered a program to establish a stability
    and security platform in the Caucasus that includes both Armenia and
    Russia. This, in addition to bilateral negotiations with Armenia, are
    positive but fragile developments that will hopefully ease tensions
    and lead to a more normal and stable relationship between Armenia and
    Turkey who, in the final analysis, are destined to remain permanent
    neighbors.
    ***************************** ***********************************************
    6. CASH STILL KING: PAYING BILLS BY MACHINE AND WITHOUT QUEUES REMAINS
    A NOVEL IDEA IN ARMENIA

    Sara Khojoyan
    ArmeniaNow reporter

    For already a year the streets in Yerevan as well as those in other
    large towns have blomed with orange-blue machines a meter and half
    high inviting passersby to bill-paying convenience.

    Sidewalk terminals have brought electronic transactions as Automated
    Teller Machines made banking more accessible a few years ago here.

    Aram Barseghyan, a resident of Yerevan, has been making his utility
    services and cell phone payments through such terminals since they
    first showed up. Users can pay water, electricity, gas services, but
    most use them to pay for cellphone use.

    "You don't need to stand in line, or hear one telling you there is no
    change, or express discontent. One other good thing is that you can
    pay in parts. I do all the payments very quickly, in just 10 minutes,
    and can do them at any time. The good thing is the terminals provide a
    number of services and there is an opportunity to pay for
    international cell calls and also pay loans," says Barseghyan.

    Currently, there are five companies operating such kiosks: TellCell,
    MegaPay, OSMP, MGPay, and Tandem, and as the representatives of the
    sphere mention, the first two are on leading positions. TellCell has
    325 of about 600 total devices across the republic.


    Aram Azatyan, executive director of the TellCell says despite the
    company has already positioned itself in the market and makes about
    7,000 deals per day through the terminals, there are still problems in
    the sphere: "We have overcome the major difficulty, people have got
    used to paying through terminals. But there are still gaps in the
    legislation in Armenia."

    "There are still many unused opportunities because of the lack of
    proper legislative norms. For instance, any internet club could be an
    outlet to pay for, say, prepaid cell cards. But the present
    legislation says a company has to be licensed by the Central Bank to
    accept payments," Azatyan explains.

    Azatyan says also the transfers through the terminals are made online
    and take a few seconds, whereas the traditional method of payment
    needs three days to fulfill the transfer.

    The fact that people have started to accept this means of payment is
    witnessed also by the representative of the Mega Pantera company, the
    MegaPay terminals' owner, Georgi Khurshudyan.

    Khurshudyan says the general population has had a mistrust of
    payment-by-machine which is gradually being overcome in favor of the
    convenience afforded by electronic payment. About 700,000 transactions
    were made through Mega Pantera's 250 terminals in the first year.

    Other payment alternatives were offered in Armenia several years ago.
    Beginning 2004 Edram system was introduced in Armenia; the system
    gives internet users opportunity to make online payments.

    E-dram helps pay for gas, water, electricity, wire and cell phones, as
    well as loan obligations with banks.

    Anna Grigoryan, communications executive of the Edram says there are
    18,000 people now registered with the system making more than the 10
    percent of all internet users in Armenia.

    Grigoryan mentions two major problems of developing the sphere in
    Armenia - one, the accessibility of the internet, and second, internet
    literacy.

    The system has no such problem with Hamlet Kocharyan, a resident of
    Yerevan, as the latter has been using it for more than a year already:
    "Of course, it makes life easier, I buy their card and make all my
    payments just from the workplace without standing in queue or losing
    time. And the good thing is also that they don't take money for making
    the utility service payments."

    ArCa card holders, who have registered their cards in the virtual
    system, have also had the opportunity to make online payments since
    2004.

    Armen Safaryan, head of the business development and international
    ties unit of the Armenian Card CJSC says 4,845 virtual cards were
    registered as of December 25, 2008.

    "I think this figure is not enough, but the situation is created by
    objective reasons - the problem of accessibility of the internet and
    the communication lines and lack of internet awareness. The mass of
    people to be able to pay through the internet is lacking," says
    Safaryan.

    The ArCa is starting an active campaign in 2009 to make the system
    more popular: "We will be making cooperation offers to companies, who
    mostly do not know of such opportunity, say, the disc shops, who do
    not know they can sell the products online," adds Safaryan.

    At present the ArCa system allows paying for a number of services -
    telephone (local, international, mobile, prepaid, Easy and Alo card
    reloading), electricity, gas, and water, but the most well-known of
    the provided opportunities is the one of making transfers to ArCa,
    Visa and MasterCard holders, from card to card.

    The director of the TellCell company sees no threat of possible
    decrease in the number of cash payments in case of the development of
    the internet.

    "First, Armenia is classified among the countries with large volumes
    of cash circulation, and then only 7-10 percent of the population uses
    internet, which means we still have chance to develop for another 3-5
    years," says Azatyan.

    **************************************** ************************************
    7. ART AND PURPOSE: FAMILY CARE FOUNDATION SCHOOL TEACHES BEAUTY AND BUSINESS

    By Siranuysh Gevorgyan

    A small basement room of the seemingly ordinary two-storied building
    in Koghbatsi Street is full of colourful Christmas angels, with jugs,
    pitchers and flower pots of different size, small spruces and other
    New Year tree decorations. The common feature of all these handcrafted
    items is that the ornaments on them are borrowed from Armenian
    miniature.

    They are in fact "the hidden treasures of Yerevan". This is how the
    items on display at the Family Care charitable foundation's exhibition
    hall are called. They all were made by the charges of the Veratsnund
    (Revival) art school in the northern town of Spitak.
    (A majority of these children are of school age).

    Mnay of these items have been decorated by Tatevik Sahakyan, a
    designer at the Veratsnund (Revival) School. Tatevik, 21, has been
    attending the school for the last four years. She says the school has
    already become an indispensable part of her life.

    Tatevik says she generally manages to finish up two items a day.

    "It depends on the size of the item and the complexity of the
    ornament," she explains.

    The ornaments on the items are all taken from the Armenian miniatures
    but Tatevik says she sometimes can't keep from making a small
    amendment in the ornament, showing 'a personal attitude'.

    Tatevik is a graduate of the department of outfit design at the
    Vanadzor pedagogical college, but does not work by profession yet. She
    says she liked the work of decoration when she was still at school.

    "This school is of big importance to me. I had nothing to do at the
    beginning and came here because of the interest. I then realized I
    like this work very much and stayed here," she says.

    The opening of the school in 1994 was initiated by Family Care
    Foundation Director Antonio Montalto, who is also Italy's consul in
    Gyumri. Montalto had also opened Villa Delenda B&B to cover the
    Foundation's expenses. It is on the basement of this hotel that the
    display of the children's handcrafted items is staged.

    "The school gives an opportunity to kids to get away from everyday
    duties after school and get detached from the unpleasant reality,"
    says the Foundation's manager Lusine Ghazaryan.

    There is a pottery by the school, where these beautiful items are made
    and baked. Then they decorate this small exhibition in Yerevan owing
    to Tatevik and other designers.

    Arpine Papyan, head of the art school says children at school get a
    number of skills, including drawing, making various items from paper
    and clay and also decorate them.

    The school in Spitak, which is about 100 kilometers to the north of
    capital Yerevan, works six days a week. On the first three days
    children living in the Italian district of Spitak attend, and on the
    rest of the days the school is open for attendance by children with
    special needs.

    "Now there are 14 children in the first group and 11 in the second,"
    says Papyan.

    Since 2001, the Family Care Foundation has also offered an interest
    group for women where they have an opportunity to knit nice wear,
    engage in sewing or needlework.

    The school's children send their pieces of work to Yerevan twice a
    week. The proceeds originating from their sales are sent back to
    Spitak to be paid to the school's charges for their work.

    Ghazaryan says the sales are not big enough to seek profits.

    "The Foundation in one way or another maintains the Veratsnund school,
    however the proceeds from the sale of these nice things also help
    cover some expenses," says Ghazaryan.

    All items crafted by the children are made from clay.

    "All these items can be used to keep food in them as all of them are
    made from non-toxic materials. There are even certain color
    restrictions, since not all colors can be obtained in a natural way,"
    the Foundation's manager says.

    Ghazaryan adds that the main buyers of the children's works are
    tourists who stay at Villa Delenda.

    **************************************** ************************************
    8. HOT LINE: A NEW CENTER IN VANADZOR PROMPTS CITIZENS TO REPORT
    CORRUPTION CASES

    Naira Bulghadaryan
    ArmeniaNow Vanadzor reporter

    An Anti-Corruption Center has opened in Vanadzor, where citizens may
    call a hotline and anonymously file complaints on authorities they
    suspect of wrongdoing.

    The hotline (0 8000 1112) started operation last month and is operated
    as part of the initiative of Interests Protection and Support Centers
    in Vanadzor, Gyumri and Yerevan project of the Transparency
    International Anti-Corruption Center NGO.

    The citizens will find support at the Helsinki Citizens Assembly
    Vanadzor office in Vanadzor, the Asparez Journalists' Club in Gyumri,
    and the Transparency International Anti-Corruption Center NGO in
    Yerevan.

    The three organizations have created a coalition of anti-corruption
    activities to be financed by Casals & Associates Inc. of the United
    States Agency for International Development (USAID) who will be
    realizing the Mobilizing Action against Corruption within the next 4
    years.

    The centers will provide citizens with free legal advice, as well as
    will restore the violated rights of the citizens in courts in case of
    necessity with the help of the centers' experts.

    As of yet, few residents know about the service.

    "I will surely call if I see any violation," says Rafayel Movsisyan,
    53, who did not know of the newly opened center until informed.

    Movsisyan calls the recent activation of the government's work and
    anti-corruption activities a game to ease the existing tension, as he
    says: "to soothe the people's worries."

    He says he will believe the government if high ranked officials are
    punished for engagement in corruption and not some lower ranking
    members who become scapegoats.

    "The spine of the corruption should be broken," to have tangible
    results in the fight against it, says Movsisyan.

    Even before the hotline was setup anti-corruption workers in Vanadzor
    conducted a survey and started investigation into the activities of
    the municipalities of Vanadzor and Tashir particularly the cases of a
    free of charge handing over of a land lot to an individual by the
    mayor of Vanadzor as well as the community budget allocations made by
    the mayor of Tashir.

    "We will take steps based on the analysis of the decisions to have the
    officials brought to administrative responsibility," says the
    coordinator of the Helsinki Citizens Assembly Vanadzor office Artur
    Sakunts, who also heads the Vanadzor center.

    The center has its branches in the rest of the towns of the province
    at the regional representations of the Helsinki Citizens Assembly.

    Sakunts says the anti-corruption center will first deal with the
    consequences of corruption, and only later, the reasons.

    The head of the Lori anti-corruption center says the primary necessity
    in fighting corruption is to increase the level of awareness among
    citizens.

    "In some cases citizens unaware of their rights do not even guess what
    happens to them is a corruption case, because they frequently perceive
    it as just giving and getting bribes," says Sakunts.

    He says officials take advantage of citizens' unawareness to demand
    bribes, which is considered a minor manifestation of corruption,
    whereas the abuse of official position in favor of some group
    interests discriminating against another group, mostly an unprotected
    one, is more dangerous.

    "There is no money interest here, but there is power abuse with discrimination."

    Haykuhi Harutyunyan, lawyer at the Lori anti-corruption center says
    its efforts should have influence on legislation.

    "Very often cases of corruption are a result of legislative gaps.
    There is serious controversy in the definition and the responsibility
    provided for criminal, civic, ad administrative cases of corruption,
    furthermore, the practice of their implementation makes the work even
    harder," says Harutyunyan. That is the reason, the centers say,
    legislative changes are an important part of their activities and they
    plan to appear with proper initiatives in the future.

    The Lori center along with professional lawyers plans to file 16 cases
    in court within the next two years mostly in regard to its research,
    with a perspective of serving as precedents to be applied for other
    cases.

    Casals & Associates Inc. has plans to open other centers throughout
    Armenia as part of its implementation for USAID.
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