Armenia's Economic Pulse

[Siamanto]

Re: Armenia's Economic Pulse

Technology Sector News

ABOUT 15 EVENTS ON INFORMATION TECHNOLOGY SECTOR TO BE ORGANIZED IN ARMENIA IN SEPTEMBER AND OCTOBER OF THIS YEAR

Noyan Tapan
Aug 27 2007

YEREVAN, AUGUST 27, NOYAN TAPAN. About 15 big events related to IT
sector will be organized in Armenia in September and October of this
year, NT correspondent was informed by Bagrat Yengibarian, director
of the Enterprise Incubator Foundation (IEF).

According to him, the international microelectronics symposium "IEEE
EWDTS 2007 - East-West. Design and Test" will be held in Yerevan on
September 7-10, while the international conference "InnovationECA 2007"
will take place on September 17-20. It is also envisaged to hold the
second world youth IT congress.

In September-October, the EIF together with Microsoft's Armenian Office
will hold a contest of young programmers "ImagineCup", as well as a
regular olympiad of microelectronics. Besides, some agreements will
be signed with big foreign companies in the indicated months, with
the official opening ceremonies of their Armenian centers being held.

This series of IT events will finish with the traditional exhibition
Digitec 2007 to start on October 26, during which a number of
conferences are envisaged. B. Yengibarian said that the holding of
this exhibition on a later date than in previous years is due to the
fact the exhibition's area, K. Demirchian Sport and Cultural Complex
is undergoing repair.

http://groong.usc.edu/news/msg200277.html

ARMEDIA WEAVES CONTENT MANAGEMENT LOGIC INTO COMPLEX LANGUAGE
By Angela Natividad

CMSWire, CA
Aug 27 2007

Along with the pleasure of growth comes the familiar pain of
multilingual translation.

Translation, a process that seems simple enough, actually requires
great skill - not all subcultures or age groups communicate in the same
way. Then there's the matter of localization, or better tailoring a
product to a certain market, which is also an oft-overlooked element
of interpretation.

The point: translation is complex. With that in mind, Language Weaver
and Armedia have jointly released Machine Language Translation for
the enterprise CMS community.

The tool translates your text into the language(s) of choice via
EMC Documentum, a strong and scalable CMS that Armedia has been
fortunate enough to work closely with. And the Armedia/Language Weaver
partnership has sought to make the process of exchanging one language
for another as fluid as human translation (without the anal-retentive
human translator).

Complete content conversions are completed within minutes, across
any of Documentum's online interfaces.

But the two companies don't expect to stop at Documentum's door.

Armedia plans on tapping a string of other, and older, content
management relationships in order to push this technology. These
include SharePoint and FileNet, as well as mainstream open source
solutions like Joomla and Alfresco.

Possibilities of integration are available across these channels
(though it isn't clear whether the company will be meeting users
halfway or whether users can work said possibilities out on their own),
and available languages include the 37 language pairs supported by
Language Weaver.

If you're feeling iffy about it, it bears mentioning that Armenia won
a contract to implement the solution for the Defense Intelligence
Agency. Would Defense Intelligence utilize a sub-par tool for its
intercontinental needs? Actually, don't answer that.

http://groong.usc.edu/news/msg200269.html

A NUMBER OF BIG PROGRAMS PRESENTED FOR FINANCING BY VENTURE FUND MANAGED BY EIF AND CASCADE CAPITAL


Noyan Tapan
Aug 27 2007

YEREVAN, AUGUST 27, NOYAN TAPAN. With the aim of financing developments
of Armenian scientists, a number of big programs (the cost of each
exceeds a million dollars) have been presented to the board of the
venture fund (its authorized capital makes 1 million USD) set up by
the Cafesjian Family Foundation, NT correspondent was informed by
director of the venture fund's co-manager, - the Enterprise Incubator
Foundation (EIF) Bagrat Yengibarian.

Another co-manager of the venture fund is Cascade Capital investment
company also founded by the Cafesjian Family Foundation in Armenia.

In the words of B. Yengibarian, the presented programs are, in
particular, related to such sectors as biotechnology, IT, pharmaceutics
and precise machine tool building. He said that negotiations are
currently underway with several US venture funds in order to obtain
additional sources of finance.

B. Yengibarian reminded that the indicated programs were presented
during the first All-Armenian high-tech congress ArmTech 2007 in San
Francisco on July 4-7, in which representatives of a number of large
US venture funds took part.

To recap, the venture fund managed by EIF and Cascade Capital was
created in early 2006.

http://groong.usc.edu/news/msg200249.html

[Siamanto]

Re: Armenia's Economic Pulse

PROBLEM OF HIGH PRICES FOR COMMUNICATION STILL ACTUAL IN ARMENIA

AZG Armenian Daily
31/08/2007

The issue of modern communication systems in Armenia was the subject of
a discussion at the Armenian Center of Strategic and National Research,
August 29.

The most of the invitees did not esteem either the discussion of
the Research Center or the problem of communications itself and were
absent. One of the most important figures of the event, head of the
Communications Department of the Armenian Ministry for Transportation
and Communication Gevorg Baloyan, left as soon as he arrived, because
of an "extraordinarily important phone call". He was to represent the
communications system of the Republic of Armenia, the official policy
of the Government and the prospects of development of the sphere.

After a reference to the "good old" Soviet times, a more interesting
but still vague research on communication fees in Armenia was made. The
research contained an extensive comparison of communication fees
in Armenia with those in Georgia, Azerbaijan, Russia and the United
States.

In any case, certain conclusions in the research are worth
attention. Thus, only in Armenia there is difference between subscriber
fees for physical and juridical persons. In fixed telephone network
per minute fee is not charged in Azerbaijan and Georgia, and in Russia
and USA per minute fee is at least three times less than in Armenia.

In Armenia a physical person spends is 19,5% of his/her $197
average monthly salary on fixed phone communication fee payments,
in Azerbaijan - 8,9% of $196, in Georgia - 22% of $115, in Moscow,
Russia, 4% of $500, and in USA - 0,7% of $3120.
[ if "in USA - 0,7% of $3120," I wonder what "fixed phone communication fee payments" means??? Are they comparing "apples and oranges???" Siamanto]

Economy science doctor Tatoul Manaserian stated during the discussion
that Armenia is also vulnerable in sense of information security. He
said that although the Government has proclaimed the communication
sphere a priority of national development, it does nothing to
insure that priority. In the meanwhile in Armenia's neighbor states
communication sphere is seriously attended and assisted by the
Government.

Mr. Manaserian noted that the networks of both the Government and the
National Assembly of Armenia are not protected and information loss
can easily occur, threatening the national security of the country.

The last accent of the discussion was made on the present state
and development of Internet communication in Armenia. The issue was
represented by director of the Arminco company Andranik Alexanian.

Complaining of the low-quality services of "the Greek ArmenTel",
he said that this circumstance hampered development of Internet
communications in Armenia for about ten years. Nevertheless Internet
developed in Armenia due the efforts of certain wise people, yet
everything could be much better if there weren't the high prices and
low quality of ArmenTel. Mr. Alexanian added that only a year or two
ago internet communication fees in Armenia were among the highest in
the world.

According to the Arminco director, Armenia has about 5000 specialists
in that sphere, which shift from company from company and new
specialists are few.

Therefore he emphasized the question of having skilled IT teachers
in schools and so providing competition.

"Otherwise, normal specialists will leave Armenia, as they do now,"
he concluded.

http://groong.usc.edu/news/msg200694.html

[Siamanto]

Re: Armenia's Economic Pulse

PROGRESS RECODRED IN ARMENIA'S STATE BUDGET IN 2006: CBA CHAIRMAN

ARKA News Agency
Sept 3 2007
Armenia

YEREVAN, September 3. /ARKA/. Progress was registered in the RA
State Budget in 2006 as compared to preceding years, and the tendency
continues in 2007, reported CBA Chairman Tigran Sargsian.

He stated that this year tax receipts grew as compared to 2006. In the
sphere of social expenditures which were panned on the level of 15.3%
a 21.1% progress was recorded.

Sargsian pointed out that despite progress, there are certain problems
which must be solved for raising the effectiveness of monetary
management and tax-budgetary policy. "It is necessary to secure the
growth of GDP-tax ratio. Though an overfulfilment was recorded in
the tax sphere, its growth rates still cede the GDP growth," he said.

Sargsian believes the only way-out of the situation a more detailed
analysis of the reasons for the divergence of the GDP-tax ratio.

The CBA Chairman pointed out that budget expenditures were greatly
economized in the reporting period, which was more apparent in the
first and second quarters of 2006. The rates of the cash turnover
decreased in the reporting period.

Sargsian pointed out that the processes affected the coordination of
monetary management and tax-budgetary policy. The issue will remain
topical both in 2007 and 2008, he said.

The Ra Parliament adopted on November 11, 2005 the law "On the State
Budget in 2006". Its revenues totaled AMD 497bln, the expenditures
being 556.8bln. The budget deficit totaled AMD 69.8bln.

According to the RA Statistic Service, the on-budget expenditures
totaled AMD 454977.6mln in 2006 - a 15.1% increase as compared to
the corresponding period in 2005.

The budget revenues and official transfers totaled AMD 439620.1mln
in 2006, the deficit being AMD 15357.5mln which makes 0.6% of the
GDP against 2.5% in 2005.

http://groong.usc.edu/news/msg201006.html

[Siamanto]

Re: Armenia's Economic Pulse

Monetary Mass: Volume, Circulation and Inflows/Outflows

MONETARY BASE GROWS BY 5.4%, BROAD MONEY - BY 6% IN ARMENIA IN JULY 2007

Noyan Tapan
Sep 4, 2007

YEREVAN, SEPTEMBER 4, NOYAN TAPAN. The monetary base made 302 bln
835 mln drams (about 855.3 mln USD) in Armenia as of July 31, 2007,
increasing by 15 bln 518 mln drams or 5.4% on the previous month.

According to the RA National Statistical Service, the broad money
made 554 bln 279 mln drams as of the same day, growing by 31 bln 243
mln drams or 6% on the previous month.

The balance of the population's deposits with banks amounted to 150
bln 408 mln drams as of July 31, 2007, growing by 7 bln 717 mln or
5.4% drams on the previous month and by 43 bln 171 mln drams or 40.3%
on the respective period of last year.

http://groong.usc.edu/news/msg201159.html

CASH FLOWS INTO ARMENIA'S BANKING SYSTEM REACH AMD 891.6BLN IN JAN-JULY 2007

ARKA News Agency
Sept 4 2007
Armenia

YEREVAN, September 4. /ARKA/. Cash flows into Armenia's banking
system reached to AMD 891.6bln by late July after growing 40.86%
or by AMD 258.6bln between January and July 2007, compared with the
same period a year earlier.

Central Bank of Armenia told ARKA News Agency referring to National
Statistical Service's figures that AMD 128.3bln or 14.39% of total
receipts came from currency sales.

According to the report, cash inflows received from currency sales grew
14.42% or by AMD 16.2bln and their quota in total receipts reduced by
3.33 percentage points, compared with the same period a year earlier.

In Jan-July 2007, cash expenses totaled AMD 930.7bln, of which 327.8bln
or 35.22% was spent for currency purchase.

Compared with Jan-July 2006, expenses grew by 287.6bln or 44.72%.

Expenses for buying currency grew 73.75% or by AMD139.1bln.

Cash expenses exceeded income by AMD 24.2bln in Jan-July 2007 while at
the same period of 2006 income exceeded expenditure by AMD 10.2bln. In
Jan-July 2007 currency purchase/sale deals brought the amount smaller
by AMD 262.6bln than expenses. At the same period of 2006, expenses
exceeded income by AMD 76.5bln. ($1 - AMD 336.48).

http://groong.usc.edu/news/msg201145.html

UNISTREAM MONEY REMITTANCE SYSTEM REPORTS SURGE IN TRANSFERS

ARMENPRESS
Sep 7, 2007

YEREVAN, SEPTEMBER 7, ARMENPRESS: The UniStream money remittance
system, operated by UniBank, has reported a 75 percent increase in
money transfers in August from a year before which it said rose to
almost $70 million.

Vartan Atayan, Unibank chairman of board, said nearly half of money
transfers in Armenia is handled by the bank. The amount of money
transfers operated by the system in January- August of 2008 rose to
$364 million. According to Vartan Atayan, they expect the number to
rise up to $600 million before the end of the year.

The Unistream money remittance system that allows receiving and
sending money transfers without account opening was established in
2001. UniStream has become attractive because of low commissions
which make 1 percent of the remitted money if the transfer is made
in hard currency and zero commissions if it is in Armenian Drams.

http://groong.usc.edu/news/msg201618.html

[Assuming that, in average, a tourist has spent $1000USD; it would mean $180M USD in the first half 2007. Siamanto]

NUMBER OF TOURISTS TO ARMENIA INCREASES BY 36.3% IN FIRST HALF OF 2007 ON SAME PERIOD OF LAST YEAR

Noyan Tapan
Sep 4, 2007

YEREVAN, SEPTEMBER 4, NOYAN TAPAN. 38,077 internal tourists were
accommodated in tourist lodgings of Armenia in January-June 2007,
which is more by 24.3% than in the same period of last year.

181,239 tourists came to Armenia in the first half of 2007 against
132,937 in the same period of 2006. Tourists from CIS countries made
up 25.2% of them (26.8% in the same period of 2006), including tourists
from Russia who made up 18.2% (19.9% in January-June 2006).

According to the RA National Statistical Service, 23,122 tourists
stayed in 40 hotels of Armenia in January-June 2007 against 21,825
in the same months of 2006.

Tourists from EU countries made up 37.3% of the total number of
tourists to Armenia in the first half of 2007, including tourists from
France - 12.9%, Germany - 7%, the UK - 6.9%, from other EU countries
- 10.5%

http://groong.usc.edu/news/msg201163.html

WITHIN ONE YEAR, RA FOREIGN NATIONAL DEBT INCREASES BY 98.2M USD AND DOMESTIC DEBT BY 482.2M DRAMS

Noyan Tapan
Sep 4, 2007

YEREVAN, SEPTEMBER 4, NOYAN TAPAN. As of late June, 2007, the RA
foreign debt amounted to 431bn 587m drams or more than 1bn 256.8m
USD. As of late June, 2006, it made nearly 1bn 158.6m USD. Thus, the
RA foreign national debt has increased by 98.2m USD within one year.

According to the data of the RA National Statistical Service, as of
late June, 2007, the RA domestic national debt amounted to 58bn 702m
drams. As of late June, 2006, it totalled 55bn 219.8m drams. The
RA domestic national debt has increased by 3bn 482.2m drams within
one year.

http://groong.usc.edu/news/msg201160.html

[Siamanto]

Re: Armenia's Economic Pulse

Some Consumer Related Data: Income, Expenses, Savings, Credits...

INCOMES OF ARMENIAN POPULATION INCREASE BY 26.9%, EXPENSES - BY 23.6% IN JANUARY-JULY 2007 ON SAME PERIOD OF LAST YEAR

Noyan Tapan
Sep 5, 2007

YEREVAN, SEPTEMBER 5, NOYAN TAPAN. Monetary incomes of Armenia's
population made 1 trillion 41 billion 612.8 million drams (over 2 bln
941.7 mln USD), while monetary expenses - 1 trillion 2 billion 429.9
million drams in January-July 2007. According to the RA National
Statistical Service, the growth rates of these indices made 126.9%
and 123.6% respectively as compared with January-July 2006.

The real monetary incomes of the population (incomes less compulsory
payments, taking into account the changes in the consumer price
indices) grew by 20.9% in January-June 2007 on the same period of 2006.

The average monthly nominal salary exceeded 3.8fold the minimum salary
in June 2007 as compared with 4.3fold in 2006.

http://groong.usc.edu/news/msg201345.html

MORTGAGE CREDITING TO DOUBLE IN ARMENIA IN 2007 ON LAST YEAR

Noyan Tapan
Sep 6, 2007

YEREVAN, SEPTEMBER 6, NOYAN TAPAN. It has been forecast that the amount
of mortgage crediting will at least double in Armenia by results
of 2007 as compared with last year, the head of the Central Bank of
Armenia (CBA) Financial System Policy and Analyses Department David
Sargsian said at the September 6 press conference.

According to him, mortgage crediting by Armenian banks made 23 bln
770 mln 50 thousand drams (over 57 mln 134 thousand USD) in 2006,
which is more by 114% than in the previous year.

D. Sargsian said that a growth has been registered this year in
crediting of consumer sector, trade, industry and agriculture. In
particular, crediting of industry and agriculture has grown by
27-35%. According to the CBA representative, the crediting growth
rates in these sectors will contunue by late 2007.

To recap, the sum of 39 bln 263 mln 980 thousand drams provided to
industry as of December 31, 2007, has increased by 0.4% in a year,
while 14 bln 196 mln 429 thousand drams to agriculture has increased
by 25.6% in a year.

In the words of D. Sargsian, the average decline in credit interest
rates made 0.5% in January-June 2007. Business crediting was done
at the average interest rate of 15% in 2006, whereas now it makes
14-14.5%, while interest rates of consumer crediting have fallen from
21-21.5% to 19%.

http://groong.usc.edu/news/msg201433.html

[Not completely consumer related, but seemed relevant enough???? Siamanto]

CBA OFFICIAL: MITIGATION OF BANKING SUPERVISION STANDARDS WILL RESULT IN 60% GROWTH OF CREDITING

Noyan Tapan
Sep 6, 2007

YEREVAN, SEPTEMBER 6, NOYAN TAPAN. The Central Bank of Armenia
(CBA) is continuing to take measures aimed at mitigation of banking
supervision. It is forecast that thanks to this, the volume of
crediting by the RA banking system will grow by 60% by results of
2007 as compared with last year (as of December 31, 2006, the total
amount of credits provided by Armenian banks and their bills receivable
made 298 bln 310 mln 37 thousand drams or about 820.7 mln USD), the
head of the CBA Financial System Policy and Analyses Department David
Sargsian said at the September 6 press conference.

According to D. Sargsian, the RA banking system is currently at the
third stage of development, whose main purpose is to increase sharply
the volumes of crediting and to enhance access to financial services
from the terrirorial point of view. The speaker noted that during the
first stage of formation of the RA banking system (1991-1996), the
main task was formation of private commercial banks: at the end of this
stage, more than 70 banks were operating in Armenia. The second stage
was marked by the process of "cleansing" the banking system when the
banks not in line with international standards stopped their operation.

In his words, taking into account the fact that Armenian banks are
now at a qualitatively high level of risk management, the CBA has
considered it expedient to mitigate requirements on regulation of
banking activity. It was forecast that thanks to such mitigation,
the banks will reduce their expenses and use available resources
for crediting.

He noted that in early 2007 the CBA mitigated the prudential standard
of current liquidity of banks, which allowed banks to allocate
additional 27 billion drams to crediting. The capital adequacy
standard and the overall liquidity standard will be mitigated soon
as well, allowing banks to allocate at least additional 35 bln drams
to crediting.

D. Sargsian added that as a result of using another package of
amendments in normative requirements, considerable incentives have
been created for increasing the range of financial services and
expanding their volumes and territorial coverage. Henceforth the
banks will be able to implement movable crediting activity without
opening their branches in regions. The technical requirements to the
premises of branches have been mitigated as well, thanks to which
expenses on establishment of a branch will be reduced. At the same
time, the branch management of those banks that have an efficient
internal system of staff qualification and training will no longer
have to undergo qualification checks at the CBA.

D. Sargsian said that thanks to the indicated measures, an
unprecedented growth of crediting (90 bln drams) was registered in
January-August 2007 on the same period of last year.

http://groong.usc.edu/news/msg201434.html

[Siamanto]

Re: Armenia's Economic Pulse


Overall Economy: Investment, Production & Trade

INFLOW OF FOREIGN INVESTMENTS INTO REAL SECTOR OF ARMENIAN ECONOMY GROWS BY 37.2% IN FIRST HALF OF 2007 ON SAME PERIOD OF 2006

Noyan Tapan
Sep 5, 2007

YEREVAN, SEPTEMBER 4, NOYAN TAPAN. The inflow of foreign investments
into the real sector of Armenia's economy (without those received
through the state governance and banking systems) made 244 mln 995.7
thousand dollars in January-June 2007, growing by 37.2% as compared
with the same period of last year, including direct investments of
152 mln 456.2 thousand dollars (76.7% growth).

According to the RA National Statistical Service, resources received
from privatization of organizations made 26.7% of direct investments
or 40.7 mln dollars in January-June 2007. The total amount of foreign
invetsments in the real sector without privatization resources grew
by 14.4% on Jnauary-June 2006, the amount of direct investments -
by 29.5%.

48.7% of foreign investments and 56.7% of direct investments in the
real sector of Armenian economy was made in the communication sector
in January-June 2007. 9.2% of direct investments was made in the air
transport sector, 8.2% - in construction.

http://groong.usc.edu/news/msg201346.html

[The fact that "industrial production was 388 bln 117 mln drams" and "production of 393 bln 985.8 mln drams was sold" is, usually, a positive future indicator. Siamanto]

INDUSTRIAL PRODUCTION GROWS BY 1.3% IN ARMENIA IN JANUARY-JULY 2007 ON SAME PERIOD OF LAST YEAR

Noyan Tapan
Sep 4, 2007

YEREVAN, SEPTEMBER 4, NOYAN TAPAN. Industrial production of 388
bln 117 mln drams (over 1 bln 96.1 mln USD) was made in Armenia in
Jnauary-July 2007.

Production of 393 bln 985.8 mln drams was sold, including production
of 44 bln 156.8 mln drams in CIS countries, that of 98 bln 717.6 mln
drams - in other countries.

According to the RA National Statistical Service, the index of
industrial production made 101.3% in the first seven months of 2007
as compared with January-July of last year, the same index without
production and distribution of electricity, gas and water made 100.2%,
without diamond production - 108.7%.

http://groong.usc.edu/news/msg201161.html

ARMENIAN EXPORTS GROW BY 20.8%, IMPORTS BY 44.5% IN JANUARY-JULY 2007 ON SAME PERIOD OF LAST YEAR

Noyan Tapan
Sep 5, 2007

YEREVAN, SEPTEMBER 5, NOYAN TAPAN. The Armenian foreign trade made
800 bln 503 mln drams or 2 bln 262.9 mln USD in current prices in
January-July 2007.

Exports made 222 bln 916 mln drams or 631.1 mln USD, imports - 577
bln 587 mln drams or 1 bln 631.8 mln USD. The foreign trade balance
was negative by 354 bln 671 mln drams (1 bln 0.7 mln USD), the balance
without cargoes received as humanitarian aid - 337 bln 383.4 mln drams
(952.2 mln USD).

According to the RA National Statistical Service, exports grew by
20.8%, imports -by 44.5% in the first seven months of 2007 on the
same period of 2006.

Exports to CIS countries amounted to 189 mln USD in January-July 2007
(83.4% growth on the same period of 2006), imports made over 452.3
mln USD (51.6% growth). Exports to Russia made 111.8 mln USD (105.4%
growth), imports - 292.3 mln USD (57.7% growth). Exports to Georgia
amounted to 45.6 mln USD (46.3% growth), imports - to 56.3 mln USD
(47.7% growth).

Exports to EU countries made over 310.8 mln USD (14.6% growth),
imports from EU countries - 507.5 mln USD (39.4% growh). Exports to
Belgium made 55.8 mln USD (21.1% decline), imports - over 101 mln USD
(11.9% growth). Exports to Germany made 93.9 mln USD (12.3% growth),
imports - 58.9 mln USD (18.1% growth). Exports to the Netherlands
amounted to 87.6 mln USD (21% growth), imports - to over 17.4 mln USD
(36.4% growth).

Exports to Israel made about 16 mln USD (69.9% decline), imports -
25.2 mln USD (55.5% decline); exports to the US - more than 26 mln USD
(12,5% decline), imports - 118.7 mln USD (60.3% growth); exports to
Iran - 18.8 mln USD (8.8% growth), imports - over 74.7 mln USD (11.8%
growth); exports to Turkey made 1.9 mln USD (44.5% growth), imports -
more than 54 mln USD (32.8% growth).

http://groong.usc.edu/news/msg201347.html

[Siamanto]

Re: Armenia's Economic Pulse

Energy Sector: Gas Consumption, Future Prices and Investments

GASPROM REPRESENTATIVE: ARMROSGASPROM'S KEY ECONOMIC CHARACTERISTICS INCREASINGLY IMPROVING

ARKA
12 Sept 2007

YEREVAN, September 12. /ARKA/. Indicators of 2006 show that
ArmRosgasprom's key economic characteristics are improving and
thought to reach maximal level, Valery Golubev, deputy chairman of
Gasprom board and chairman of ArmRosgasprom's directorial board,
said Wednesday at the company's 10th anniversary celebration.

Golubev thinks this progress is due to favourable economic situation
in Armenia and effective management in ArmRosgasprom.

"ArmRosgasprom CJSC's directorial board can place on record that
the company authorities, mid-ranking personnel and all those people
working at linear sections - about 7 thousand employees - constitute a
high-qualified team knowing its strategic manoeuvre and firmly going
ahead to fulfil the strategic tasks put forward by the republic's
authorities and the company's shareholders", he said.

Earlier, ArmRosgasprom CJSC General Director Karen Karapetyan said
that the population has saved $200mln to 220mln a year since replaced
other energy sources by gas for heating homes.

Transport sector saves $150mln to 180mln a year thanks to replacing
petrol with gas for fuelling vehicles.

Presenting industrial indicators, Karapetyan said that imports and
sales have grown 1.8 times over a period between 2002 and 2007.

Gas consumption by the population grew 4.5 times. Consumption by
industrial sector grew 2.1 times and gross earning 2.2 times.

The main aim of ArmRosgasprom CJSC is to distribute natural gas in
Armenian local market, to generate and export electric energy, to
exploit and reconstruct gas-conveying and gas-distributing systems,
to implement design, financing and construction and exploitation of
new gas pipelines and underground gas depots as well as to ensure
natural gas transit through Armenia's territory to the third countries.

The CJSC enjoys monopoly on Russian gas import and distribution in
Armenian local market.

The company was established in 1997.

Its capital totals $580mln.

57.59% of its shares belong to Gasprom, 34.7% to Armenian Energy
Ministry and 7.71% to Itera.

http://groong.usc.edu/news/msg202098.html

WHAT WILL THE PRICE OF GAS BE IN 2009?

Lragir.am
12-09-2007 16:08:07

The price of gas for consumption in Russia will be 150 dollars per
1000 cu m till 2011, said the deputy chairman of Gazprom's management
committee Valery Golubev in Yerevan on September 12 when the Armenian
reporters asked what to expect regarding the price of gas for Armenia.

Golubev like the Gazprom leadership said Armenia now buys gas for
the minimum price, lower than Belarus which will pay 130 dollars per
1000 cu m from 2008, while Armenia will continue to pay 110 dollars
for another year.

For Europe, the price of gas is above 250 dollars. Golubev said in
fact Gazprom is now subsidizing the Armenian economy by selling cheap
gas to Armenia. Meanwhile, studies show that in 2011 the price of gas
will be 150 dollars, Valery Golubev says. "Today Armenia is supplied
gas for 110 dollars. It is our understanding, our understanding of the
general economic state," Valery Golubev said. He says they understand
that a steep rise in the price of gas may strike the Armenian economy,
therefore the price should rise gradually to prepare the economy.

When the price of gas went up in 2006, Armenia and Russia signed an
agreement. Russia committed to keeping the price 110 dollars from 2006
to 2009. It is not good faith because by this agreement we gave the
fifth generating unit of the Thermal Power Plant and the Armenian
section of the Iran-Armenia gas pipeline to Russia. The reporters
asked what price Russia plans to set in 2009 when the agreement
expires. Valery Golubev beat about the bush saying they sell gas to
Armenia cheaply, they understand our economic problems, they raise
the price not only for Armenia but also the others, as well as for
the Russian consumers and did not say what the price will be in 2009.

Golubev declined to answer because it is an issue to negotiate.

GAZPROM TO OBTAIN $100 STOCKS OF HRAZDAN HEAT POWER PLANT

PanARMENIAN.Net
14.09.2007 19:03 GMT+04:00

/PanARMENIAN.Net/ Sitting of the Armenian-Russian intergovernmental
committee on economic cooperation was held in Yerevan under presidency
of RA Prime Minister Serge Sargsyan and Acting Russian Transport
Minister Igor Levitin.

The committee noted the progress in the fuel and energy sector,
specifically implementation of the agreement signed March 31, 2007
by the Armenian government and Gazprom, whose investments amounted in
$111,8 in 2006. In 2007 the investments promise to reach $190 million.

According to the agreement, Hrazdan-5 power unit will be constructed
and put into operation within shortest terms.

During the sitting Minpromenergo and Gazprom were ordered to work out
proposals regarding transfer of 100% stocks of the Hrazdan power plant
to Gazprom with a purpose of creating a united multiplex of Hrazdan-5
and Hrazdan heat power plant, the RA government's press office reports.

[Siamanto]

Re: Armenia's Economic Pulse

The Moscow Times, Russia
Monday, September 17, 2007. Issue 3744. Page 9.

MTS to Buy Control Of Armenia Provider

By Lyubov Pronina
Bloomberg

Mobile TeleSystems, the country's largest mobile phone company, will
spend up to 310 million euros ($430 million) to buy control of
Armenian operator VivaCell, continuing expansion beyond the saturated
Russian market, CEO Leonid Melamed said Friday.

Mobile TeleSystems, or MTS, bought 80 percent in the parent company of
K-Telecom, which operates under the VivaCell brand. MTS paid $546 per
subscriber, Melamed said in a conference call from Yerevan.

The price "implies high multiples with a market capitalization of $791
per subscriber," Aton Capital Group said in a research note. "We
believe the valuation is justified by high growth potential in
Armenia," where mobile phone penetration is 39 percent.

Russian mobile phone companies, led by MTS, had about 162 million
users in Russia at the end of July, 20 million more than the country's
population, and are looking at other markets to sustain growth. MTS
has more than 78 million subscribers in Russia, Ukraine, Uzbekistan,
Turkmenistan and Belarus.

"This acquisition fully complies with our strategy to capture growth
opportunities in the fast-growing CIS markets," Melamed said,
referring to the Commonwealth of Independent States, which includes 12
former Soviet republics. "We expect the company will show a double
digit growth in the future."


Aton estimates the deal will add from 2 percent to 3 percent to Mobile
TeleSystems' revenue and earnings before interest, taxes, depreciation
and amortization next year.

Melamed said MTS would pay 50 million of the 310 million euros over
the next three years if K-Telecom meets financial targets. He declined
to be more specific.

K-Telecom was founded by the Fattouche family, a Lebanese investment
group that retains 20 percent in the company and may sell it to MTS
between 2010 and 2012, Melamed said.

K-Telecom has about a million subscribers and more than 66 percent of
the mobile phone market in Armenia, a country of more than 3 million
people.

Last year, the company reported sales of $104.1 million and operating
income before depreciation and amortization at $57.8 million. OIBDA as
a percentage of sales was 54.4 percent and the average monthly revenue
per user was $15.60. It stood at $12 in the second quarter this year,
Melamed said.

MTS will provide a 140 million euro technical loan to K-Telecom to pay
off existing debt and help develop the company. MTS will make an
announcement in the second quarter of next year if it decides to use
the MTS brand instead of the VivaCell brand in Armenia.

Nikolai Pryanishnikov, executive vice president at VimpelCom, the
country's second-largest mobile phone company, told reporters Friday
that his company was "calm" about the deal "because we are competitive
with MTS."

VimpelCom last year paid 341.9 million euros for Armentel, a
fixed-line and mobile operator in Armenia.

"It will be even easier for us, as MTS is a traded company and is
responsible for making financial results more transparent,"
Pryanishnikov said.

http://groong.usc.edu/news/msg202528.html

[Siamanto]

Re: Armenia's Economic Pulse

ARMENIAN DRAM RETREATS



Following a long period of valuation, the Armenian Dram been devaluating on the Armenian currency market for the past 3 days. And what’s more, this tendency became obvious after the stabilization observed around two months ago, when the value of US Dollar fluctuated within the limits of AMD 337-338.

Notwithstanding the above-mentioned, the developments observed on the currency market can hardly be considered serious fluctuations, at least for the time being. The devaluation of Dram occurs more smoothly, at an average rate of 0.5 units.

In the currency exchange units, Dollar is exchanged at the rate of AMD 339-339. There is a certain shift in the exchange rate of other currencies as well. That's to say, Dram is beginning to lose its value, and this is accounted for by the increased demand for US Dollar.

It is worth mentioning that the sale-purchase transactions on the Armenian stock exchange did not undergo serious changes during the past 5 days. There was a bargaining on September 5 and 7, and this resulted in the sale and purchase of USD 3.3 million.

However, unlike the past period, the structure of the market has actually changed. While in the past the Central Bank was proposing a supply for Dollar with the purpose of preventing Dram from devaluating still further, the opposite process is taking place now. The participants of the market are proposing a demand for Dollar, and that has led to the increase of its value. The average price of transactions was AMD 339 as of September 7; this is an increase in the amount of 3 Drams, in comparison with the price that existed 4 days before.

Of course, it is impossible to definitely specify the causes of the current developments on the market. It is not ruled out that they may, some way or another, be conditioned by the current inflation tendencies in Armenia.

Although the prices on certain goods increase both on the domestic and the foreign market, the national statistic service has recorded a decrease of prices during the past 8 months. According to statistic data, the prices have decreased by 1.8 per cent in comparison with December 2006. And what’s mostly important, the inflation rate in Armenia has formed 1.6 per cent in comparison with the same period last year. That’s to say, more than 3 times less than envisaged. As we know, the 12-months inflation rate envisaged in Armenia for the current year is 4±1.5 per cent.

The low inflation rate existing currently allows for acting more freely. While in the past the Central Bank took measures for restraining the increase of prices, it currently has not problem in that regard. The inflation is even lower than the established minimum rate. Therefore, there seems to be no need for restraining the increase of prices by way of raising the value of Dram, at least at the current stage. Especially considering that certain internal factors will still have an impact on the inflation rate.

As we know, the inflation rates in Armenia are greatly dependant upon agriculture. While there was a moment when the rates appeared in the danger zone, especially due to the low crop yield of apricot, the situation has completely changed for the past 3 months. Moreover, the agricultural production is expected to grow by 7 per cent, and this will naturally have a positive impact on the price level and hence – the inflation rate.

Perhaps, it is mainly due to this factor that Armenia has recently recorded decreased indices of consumer prices. Such tendency will most probably be maintained for some time, and the increased prices on some food products will not pose a hazard to ensuring the envisaged rate of inflation.

Although it should be noted that the increased prices are related to such products that have a high specific weight in the consumer basket. At the beginning of September, Armenia recorded increased prices on grain products, butter, oil etc. On the other hand, however, prices on fuel dropped. Such changes mainly derive from the international economic situation, and their impact on the overall inflation rate in Armenia will be clear at the end of the month.

With regard to the existing currency exchange rate, we can say that the situation on the market is still unbalanced and uncertain. The tendencies of the devaluation of Dram are still preserved.

It is quite possible that the increased demand for dollar is, among other things, conditioned by active import. September and October are, as usual, considered an active period for import. This was supplemented by the increased prices on some food products, which made some entrepreneurs of this particular sphere increase the volumes of purchased products, with the purpose of avoiding new increase of prices.

VASAK TARPOSHYAN

http://www.armtown.com/news/en/has/20070911/186562037/

[Siamanto]

Re: Armenia's Economic Pulse

78 PLASTIC CARDS FALLS AT SHARE OF EVERY 1,000 RESIDENTS OF ARMENIA

ARKA
13/09/2007 18:09

YEREVAN, September 13. /ARKA/. 78 plastic cards falls at share
of every 1,000 residents of Armenia as of the end of June 2007,
i.e. conditionally every 13th resident of the country had a plastic
card.

According to the analysis of ARKA Agency based on the data of the
Central Bank of Armenia and National Statistical Service, the previous
year only 55 plastic card fell at share of every 1,000 residents or
every 18th resident was a plastic card holder.

If this dynamics of increase in the number of cards is projected and
extension of services and dynamics of the population is considered,
then 90 cards is to fall at share of every 1,000 residents or every
11th resident of Armenia will have a plastic card by the end of 2007.

Based on the same dynamics, by the end of 2008 every 9th citizen can
become a card holder and about 115 cards will fall at share of every
1,000 citizens.

Having in mind extension of the range of services and ongoing
introduction of salary projects and new card instruments (particularly
for money transfers), as well as the increasing trend toward the
growth of card business under toughening competition conditions,
the further growth of this indicator can be forecasted.

According to CBA, as of July 1 2007 250,766 plastic cards were in
circulation in Armenia, including 113,445 local "ArCA" cards (45.24%
of the overall number), 104,102 (or 41.51%) Visa International
cards, 16,003 (or 6.38%) Master Cards and 17,216 (or 6.87%) other
international cards.

As compared with the beginning of 2007, the number of plastic cards
increased 7.73% or by 18,004 cards in Armenia. The number of cards
increased by an average of 18-20,000 cards every quarter.

Consequently, the number of plastic cards may exceed 370,000 by the
end of 2007.

Yet, plastic cards are not that widely used in Armenia as in other
countries. Particularly, in a number of foreign countries with
transition economy an average of 40 plastic cards falls at share
of every 100 residents, the indicator exceeds 100 in many developed
western countries.

In Russia the number of banking cards exceeded 92mln by the end of
June. If this number is compared with the number of population in
the Russian federation, then every second resident of Russia is a
"conditional" card holder and 648.3 cards falls at share of every
1,000 population. It is too early to speak of such an indicator in
Armenia if no essential spurt is recorded in the sphere. Under the
current circumstances, the number of cards per every 1,000 population
may exceed only 300 by the end of 2015. ($1= AMD340.10).

http://groong.usc.edu/news/msg202403.html