Armenia's Economic Pulse

[Siamanto]

Re: Armenia's Economic Pulse

Every Year 15% of Armenian Population are Involved into Labour Migration

arminfo
2007-07-03 23:05:00



Every year 15% of the Armenian population are involved into labour
migration, Head of the Armenian Ministry of Territorial Administration
Agency for Migration Gagik Yeganyan told journalists, Tuesday.

At the same time, he said over the last 3 years, positive migration
balance is observed in Armenia. Moreover, the number of persons
voluntarily returning to the motherland annually rises by 20-25%.
Thus, G. Yeganyan said mass migration period is over. However, the
Government still has a number of current tasks to settle. It is
necessary to bring the migration legislation of the country in
accordance with relevant international standards. Under the programme
of contribution to migration policy formation in Armenia "Return to
Armenia," migration legislation will be improved through analysis and
assessment. G. Yeganyan said that in 2007, experts of the programme
will render technical assistance to drafting laws On Refuge and On
Organisation of Outside Service.

To recall, a regular discussion of the programme "Return to Armenia"
was held in Yerevan, Tuesday, with participation of a number of
departments and establishments of the country. The programme is
implemented by combined efforts of the British Council, the
International Center for Human Development and Armenian Ministry of
Territorial Administration.

http://groong.usc.edu/news/msg195082.html

[Siamanto]

Re: Armenia's Economic Pulse

ARMENIA'S MONEY SUPPLY TO INCREASE BY 23-25% IN 2007

ARKA
Jul 11 2007

YEREVAN, July 11. /ARKA/. In 2007, Armenia's money supply will increase
by 23-25% with the accelerated growth of the money supply.

The CBA protocol said that the money supply growth will make 37-40%
by the end of the year at the refinancing rate for July 2007.

At the same time, according to the Central Bank, in June 2008,
the annual growth of money supply will make 30-33% which will be
accompanies by the growth of cash in circulation and AMD deposits. In
this period the total money supply will make 20-22%, and the money
base will increase by 25-27%.

The annual growth of money supply in Armenia made 66% in June 2007
and the AMD deposits made 76.6%. Foreign investments in USD increased
by 19.2% whereas in AMD they reduced by 1.1%.

The protocol pointed out that money-and-credit indices during a year
coincided with the forecasts, and it testifies to maintenance of
dramalization (replacement of USD with AMD) economy process.

According to the Central Bank of Armenia, the volume of money supply
in Armenia made AMD 493.8bln at the beginning of 2007, the volume
of cash in non-banking system - AMD 216.5bln, call deposits - AMD
88.33bln. The volume of time deposits made AMD 54.4bln and the volume
of deposits in foreign currency - AMD 134.7bln.

The share of deposits in foreign currency within the money supply
made 27.27% (at the beginning of the year - 29.52%).

The total volume of money supply in Armenia has increased by AMD 7.6bln
or 1.56% since the beginning of the year. According to the RA monetary
and credit policy, the CBA forecasted growth of money supply by 21.8%
up to AMD 540.95bln. ($1 - AMD 339.02).

http://groong.usc.edu/news/msg195791.html

[Siamanto]

Re: Armenia's Economic Pulse

$12 MLN TO BE INVESTED IN MODERNIZATION OF ARMENIAN POSTAL SECTOR BY 2012

ARKA
10/07/2007 13:58

Exclusive interview of Haypost company's trustee manager Hans Boon
with ARKA News Agency

"ARKA": Mr. Boon, what impact has the transfer of Haypost Company to
the trust management of the Dutch "Haypost Trust Management" had on
the activity of Haypost Company?

Mr. Boon: The transfer of Haypost to the trust management has led to
the company's being more commercial. Its activity's transparency level
has increased, particularly the company's financial accountability.

Naturally, these are positive changes. We are trying to raise our
standards, to increase their quality, change the company's mentality
that will impact the cultural level of the Haypost service.

"ARKA": How much does the Dutch experience encourages the company's
entry to the world market?

Mr. Boon: Netherlands has big experience in the sphere of
commercialization of postal services, and that is the fundament for the
Postfinance International Company (developer of the Armenian Haypost
Company transfer to the trust management of the Dutch Haypost Trust
Management - ARKA) that has been exporting its business concepts
for over 20 years. The company's employees have working experience
in over 50 countries, including Central Europe, South Asia, South
America, and Africa. They specialize in sharing their experience
in provision of postal services, and this experience demonstrated
through postal banking.

"ARKA": How much investments in modernization of Armenia's postal
system are expected and what activities are planned to implement
under the modernization program? Are there any priority directions
in this reform?

Mr. Boon: According to the trust management program, the investment
in Armenia's postal system modernization will total approximately
$12mln for the following five years. We believe, the investments will
have an impact of the company's performance and progress of postal
services in general.

The priorities in the reform will be improvement of postal services
quality.

It means both collection of mail and correspondence, and provision
of delivery in time. Also, we intend to introduce new technologies
due to which the postal system will be fully modernized and meet the
international standards.

We are going to modernize post offices. About four to ten post
offices will be fully reconstructed during this year. The post office
will become a comfortable store where a customer can come with full
assurance to get quality service. In addition, we are thinking about
expanding the scope of our services.

Post is now associated with letters, packages, or packets, and we
are going to change this stereotype by introducing new services,
such as direct mail, designed for business clients to send out their
products and information to multiple potential clients.

Also, such services as delivery of clients' letters through their
provision of electronic files for printing and resending them to
addressees will be included. At the same time, Haypost will be
fulfill the function of feedback support, for instance by sending
information to clients with the receipt saying "we would like to
receive information from this organization henceforth".

However, our priority objective remains improvement of services
quality.

"ARKA": Will the modernization of the postal system lead to redundancy
in the company.

Mr. Boon: Of course, changes in the company will tell on the number
of its staff. Today, about 4000 people are employed at the company,
and it makes Haypost one of the largest employers of Armenia. However,
we will have rather considerable changes that will have an impact
on the number and the quality aspect of the staff. However, all the
measures will be taken with a careful approach.

The company will work with such employees who can and want to accept
changes in Haypost in order to increase its performance. For these
people we plan to provide training programs to the end of their
adjustment to changes. We also plan a very careful and farsighted
reorganization of Haypost. We do not pursue the goal to fire many
people.

Conversely, we want our employees to meet our requirements. We
will try to find a socially appropriate model and use it for proper
organization.

"ARKA": What stage is the creation of the specialized Post Bank in
Armenia currently in? When is the bank to open, how much will be the
bank's authorized capital, and what services will the bank provide
to its clients?

Mr. Boon: The creation of the specialized Post Bank is a very
interesting and important question. Much work on the bank's
preparation, particularly elaboration of marketing policy and
definition of areas of activity, procedural issues, and information
processing has been done in this direction.

Big practical work related to Haypost Company has been done. We want
Post Bank to be a very reliable organization, so that every citizen
can trust this bank. However, that means that Haypost in its turn
has to meet the high requirements with the streamlined cycle of work.

All of that requires introduction of the best technologies and
procedures.

In order for us not to have problems with clients, we want to make
sure that we will provide high-quality service, meeting the services
provided by international banks. The development of Post Bank is
currently at the initial stage. However, it is hard to call the exact
date of its creation.

As for the bank's capital, it will total no less than AMD 5bln under
the Armenian law.

The post bank will really become a bank for all. It will work with
post offices, initially providing minor services, but of higher
quality and reliability.

Post Bank will also process money transfers and attract deposits. With
plastic cards it will be possible to make different financial
operations in the bank, for instance, public utilities payment. All
these services will be provided at any post office that will
considerably save clients' time.

Our package will be especially alluring for those without a bank
account.

One more important part of the bank's work will be provision of
corporate services to companies and firms, dealing particularly with
electric energy and water supply. They can also benefit from our
services, because they will be able to receive payments for their
services quicker.

This package for them will include bills, deposit and lending services,
and the whole service related to payment of bills.

We believe that Post Bank will be an effective instrument for
companies.

The third aspect of the bank's activity will be provision of
consumer credits through which we will play a definitive role in the
microfinancing sector.

"ARKA": Will foreign investments participate in the bank's authorized
capital?

Mr. Boon: Foreign investments will participate in the bank's capital.

These will be basically funds of foreign firms. However, local
companies will also have an opportunity to invest in the bank.

Management of Post Bank will also be implemented by foreign
specialists, and we do everything to make our activity meet the
international standards of quality. We want people to trust our bank
and use its services.

It is not improbable that Armenian resident organizations will also
be able to make investments, but that will be partial investment,
likely from the funds of an investment fund to be created in future.

Also, we plan to create mutual funds and make other types of
investments, particularly, due to emission of our shares including
bond shares that everyone can buy and sell at the stock exchange. It
will create more competition in the market and stimulate demand.

"ARKA": When signing the agreement on transferring Haypost Company to
the Dutch Haypost Trust Management, the chairman of the Central Bank
of Armenia did not rule out a possibility to privatize Haypost. Is
it planned to privatize the company before the trust management
agreement expires?

Mr. Boon: Our actions today do not imply privatization. The world
experience demonstrates that post is a public organization, part of
the public service.

It can become a commercial organization within the government's
ownership. Only after that, according to the world experience, post
can be privatized.

Privatization of post is the most complicated process, because it
is very hard to provide a definite answer to the question whether
is necessary to privatize at all. We believe that all steps in
that direction should be made very carefully. As for the Haypost
privatization, it is still early to speak about it. Besides, a decision
on privatization should come from the government.

Today it is necessary to think about the near future of the post,
which consists in creation of a powerful postal sector and development
of cooperation with the private sector. For instance, in the sector of
book publishing: man can visit a post office and purchase a book that
will be delivered to him later. However, it does not mean that will
be a private business, but cooperation with a specific private sector.

The same will be with creation of Post Bank. It will be a private
enterprise, but will be created in cooperation with the public post. It
is worth mentioning that we are forming a powerful private-public
sector, and we believe that at this stage streamlining of its
productive work, not privatization, is our priority goal.

http://groong.usc.edu/news/msg195890.html

[Siamanto]

Re: Armenia's Economic Pulse

ARMENIAN CB BOARD: INFLATION MAY DEVIATE FROM TARGET INDEX IN 2007, 2008

ARKA
Jul 11 2007

YEREVAN, July 11. /ARKA/. The Armenian CB Board thinks that the
inflation may deviate from the target index in 2007 and 2008.

The Central Bank of Armenia protocol on refinancing for July 2007
said that by the end of 2007 deviations from the target index by 4%
(±1,5%). In accordance with the Central Bank of Armenia forecasts,
in December 2007, the 12-months inflation may make 5% instead of
forecasted 3.5%.

At the same time, the CBA Board member think that 3% deviation (±1,5%)
is possible in 2008. In the second quarter of 2008 the inflation may
make 4.6% against forecasted 3.3%. The CBA Board believes that in
the coming 12 months the inflation risks will prevail.

The following developments that may lead to growth of inflation index
are more possible: higher growth of international prices for crops as
compared to the expectations, higher growth for world prices for oil,
slowdown of rural economy because of unfavorable weather conditions.

The CBA Board does not exclude further consideration of interest
rates maintaining present prospect trends of economy development.

0.3% deflation is recorded in Armenia in June 2007 (as compared to
May), as a result of which the annual inflation in June 2007 made 4.8%,
which is more by 0.8pct than forecasted. According to the state budget,
by the end of 2007 the inflation in Armenia is planned at the level
of 4% (±1,5%).

http://groong.usc.edu/news/msg195886.html

[Siamanto]

Re: Armenia's Economic Pulse

CONSTRUCTION DONE IN JANUARY-MAY THIS YEAR IN RA INCREASES BY 11.6% COMPARED WITH SAME MONTHS OF 2006

Noyan Tapan
Jul 11 2007

YEREVAN, JULY 11, NOYAN TAPAN. Construction amounting to 102b 438.6m
drams (nearly 301m USD) was done in January-May 2007 in Armenia,
including construction of production facilities of 53b 032.6m drams. In
the total volume of construction, construction and assembly measures
made 87b 591.3m drams, including construction and assembly measures
of production facilities of 40b 528.6m drams.

According to the data of the RA National Statistical Service,
construction done in January-May 2007 increased by 11.6% compared
with the same period of 2006, including construction and assembly
measures that grew by 18.7%.

37.7% of construction in January-May 2007 was done at the expense of
the population and the rest with the funds of organizations.

http://groong.usc.edu/news/msg195822.html

[Lernakan]

Re: Armenia's Economic Pulse

ARMENIA RATES SECOND IN 'SUPER GROWTH' COMPANIES INDEX

PanARMENIAN.Net
31.03.2007 13:59 GMT+04:00

/PanARMENIAN.Net/ The U.S. tops the Grant Thornton International
Super Growth Index for the third year running. 44% of US companies hit
'super growth' status, an increase of 5% over the previous year. The
Index measures the country with the highest proportion of "super
growth" companies.

This year Armenia (38%) has replaced India in second position.

'Super growth' companies are defined as those which have grown
considerably more than average. To identify 'super growth' companies,
Experian Business Strategies, the economics consultancy, took four
key indicators to create a weighted index. The four indicators were:
absolute growth in turnover (adjusted for inflation); the percentage
growth in turnover (adjusted for inflation); absolute growth in
employee numbers; the percentage growth in employee numbers. By this
measure, 23% of all privately held businesses surveyed worldwide are
classified as 'super growth'.

[Lernakan]

Re: Armenia's Economic Pulse

IMF: ARMENIA IS LEADING IN THE REGION WITH MACROECONOMIC INDICES

ArmRadio.am
30.05.2007 15:38

The average economic growth in the countries of the South Caucasus and
Central Asia has exceeded 10% during the past four years, David Owen,
Senior Adviser of the International Monetary Fund (IMF) Department
on Middle East and Central Asia, declared in Yerevan today.

In his words, with the economic development index Armenia is one of
the leaders among the countries that do not produce oil. "Armenia's
macroeconomic growth has been 13% on the average during the past four
years," said David Owen.

He noted that due to the growth of export, flow of foreign capital
and direct investments in the first quarter of 2007 Armenia's economic
growth has exceeded the 10% envisaged by the budget.

The IMF representative said the majority of the countries have
constrained the nominal appreciation of the national currency rate
against USD, and Armenia is the leader in this regard (25%). In David
Owens's words, this fact had a considerable and important impact on
the macroeconomic indices of the country.

During the past two years real appreciation of national currency
has occurred in almost all the countries of the region. "Due to
the flexible policy of the Central Bank, the index reached 16.9%
in Armenia," Mr. Owen said.

According to the IMF representative, further constructive reforms
of the Armenian Government will enhance the competitiveness of the
country and will promote the growth of export rates.

[Siamanto]

Re: Armenia's Economic Pulse

AMBASSADOR: ARMENIA'S FINANCIAL SECTOR ATTRACTS KAZAKH BANKS' ATTENTION

ARKA
Jul 12 2007

YEREVAN, July 12. /ARKA/. Armenia's financial sector attracts Kazakh
banks' attention, Kazakh Ambassador to Armenia Ayimdos xxxzhigitov
said on Thursday answering the question ARKA News Agency put to him.

He said BTA Invest Bank is the biggest Kazakh investor in
Armenia. According to him, the bank has invested $40 million in
Armenian economy.

"Economic reforms are very successful here, and today Armenia is the
country with the most open economy. This fact was admitted by all
world agencies. Kazakhstan has free resources for investment outside",
the diplomat said.

According to him, Kazakhstan has invested some $18 million [billion??? Siamanto] overseas.

"Today we are considering prospects for investments in Armenia based on
the agreements reached during Robert Kocharyan's visit in Kazakhstan",
he said.

In his words, prospects of new joint companies are under consideration
as well.

The ambassador said that Kazakhstan is mainly interested in energy
sector, industry, construction, tourism and mining.

"Mutual willingness is already displayed and a new form of cooperation
should be worked out and a cooperation scheme drawn up to develop
interaction. I think the cooperation is at due level now", xxxzhigitov
said.

Commodity turnover between Armenia and Kazakhstan has grown 2.19
times for this year's five months to $116.2mln.

It made 7.6% of Armenia's total foreign turnover against 4.8% at the
same period a year earlier.

Kazakhstan's result was the third after Russia's and Germany's.

Armenian export to Kazakhstan totaled $2655thnd after growing 49.7%,
compared with Jan-May 2006.

Import in Armenia grew 2.2 times reaching $113.5mln.

Import from Kazakhstan amounted $2.1mln after growing 2.8 times.

BTA Investbank is a strategic partner to Bank TuranAlem, one of
the biggest banks of Kazakhstan. The latter bought 48.9% shares in
authorized capital of Armenian InterInvestBank CJSC in May 2005. Later,
the CJSC was renamed into BTA InvestBank.

The other shareholders are Austrian ZRL with its 31.1% and
Kazakh-Armenian company MOBILEX with 20%.

http://groong.usc.edu/news/msg195970.html

[Lernakan]

Re: Armenia's Economic Pulse

ARMENIA'S ALUMINUM FOIL MILL ROLLS AGAIN
By Robin Paxton

Reuters, UK
July 20 2007

YEREVAN (Reuters) - The aluminum foil plant on the upper slopes of
Armenia's capital accounts for around 40 percent of the ex-Soviet
republic's annual trade.

Only seven years ago, it was on the brink of ruin.

"The factory was practically dead," admits Georgy Avetikyan, general
director of the Armenal plant since its rebirth in 2000.

"But look around at the equipment we have now," he says, surveying
a factory floor filled with German-built mills squeezing thin layers
of foil from metal shipped in from Russia.

Armenal is owned by United Company RUSAL, the Russian aluminum giant
controlled by billionaire Oleg Deripaska. After a $70 million revamp
completed last year, it can produce 25,000 tonnes of aluminum foil --
12 percent of the total in the former Soviet Union.

About half of the foil, used mainly to package food, drinks and
cigarettes, is exported to the European Union, 35 percent to North
America and 15 percent to the Middle East.

"Not a single tonne leaves the factory without an order from a client,"
said Alexander Burdin, director of UC RUSAL's packaging division, which
supplies aluminum foil to companies such as Kraft Foods and Nestle.

Aluminum smelting in Yerevan dates back to the 1950s, when the Kanaker
smelter was among the Soviet Union's leading plants. But when the
growing city encroached on a plant that was built on its outskirts,
pollution became a problem.

The smelter was eventually closed, leaving the foil mill on the same
site bereft of raw materials. Financial meltdown followed the break-up
of the Soviet Union and the plant effectively stopped.

"To produce foil, you need aluminum sheet -- and we didn't have
any," said Avetikyan. "SibAl came in with their business plan and
got approval. There were several companies competing."

ECONOMIC GROWTH

SibAl, or Siberian Aluminium, was Deripaska's aluminum company at
the time -- an earlier incarnation of UC RUSAL, built on Siberia's
giant smelters and hydroelectric power resources.

Deripaska emerged as the biggest winner from the country's brutal
aluminum wars of the 1990s, when entrepreneurs vied for control of
Russia's lucrative natural resources up for grabs after the Soviet
system crumbled.

Having built the beginnings of his metals empire in Siberia, the
man now ranked Russia's second-richest extended his reach across the
Caucasus to form a joint venture with the Armenian government in 2000.

Over time, RUSAL increased its ownership of the plant and by 2003
controlled it outright. It is one of three foil plants owned by the
company, which is preparing a share float in London that bankers say
could raise about $8 billion.

The revival of Armenal mirrors consistent economic growth in the
country of 3 million people.

Armenian gross domestic product is set to rise by about 10 percent
in 2007, the fifth successive year of double-digit growth, and the
country claims the lowest inflation of any former Soviet state over
the past seven years.

Armenal employs over 800 people who earn an average monthly wage
of about $300, 50 percent more than the national average, says the
company's press secretary, Alexander Melkumyan.

A further expansion could follow.

Burdin says the plant, part of a packaging division that earned UC
RUSAL $240 million in revenues last year, has enough orders to add
60 percent to existing capacity.

Avetikyan, in blue overalls, is just happy to be working again,
inspecting operations as crane operators hoist aluminum coils to
the mill.

"We're producers, not traders," he says.

[Siamanto]

Re: Armenia's Economic Pulse

IN JANUARY-JUNE OF 2007 ARMENIA'S GDP GREW BY 11,2%

Mediamax, Armenia
July 20 2007

Yerevan, July 20 /Mediamax/. The growth of Armenia's GDP in
January-June of 2007 totaled 11,2%, as compared to the same period
of 2006.

As the press service of the National Statistical Service of Armenia
told Mediamax today, the GDP volume in January-June of 2007 totaled
944845.7mln drams.

The volume of industrial production in the republic in January-June
of 2007 stood at 327954.9mln drams, having increased by 1.4%, as
compared to the same period of 2006.

The average monthly salary in Armenia in January-June of 2007
increased by 20.5%, as compared to the same period of 2006, thus
making 71344 drams.

The salary of budget organizations has increased by 22.1%, making
52491 drams during the accounting period, and the salary of non-budget
organizations stood at 88961 drams (growth - 20.1%).

http://groong.usc.edu/news/msg196800.html

ARMENIA'S FOREIGN TRADE TURNOVER IN JANUARY-JUNE OF 2007 INCREASED BY 36,5%, THUS MAKING OVER $1892MLN

Mediamax, Armenia
July 20 2007

Yerevan, July 20 /Mediamax/. The foreign trade turnover of Armenia
in January-June of 2007 totaled 674.7bln drams or $1892.0mln, having
increased by 36,5% as compared to the same period of 2006.

As the press service of the National Statistical Service of Armenia
told Mediamax today, the export volume during the accounting period
made 187.7bln drams or $527.0mln, and the import volume totaled
487.0bln drams or $1365.0mln.

The deficit of the foreign trade balance in January-June of 2007
stood at 299.3bln drams or $838mln.

http://groong.usc.edu/news/msg196857.html