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Peace is crucial to attract investment. Who’d want to invest in a country where neighbors are hostile and can be in war at any second? Let’s take a look at examples of small countries like Armenia who are in hostile environment and have a wealthy Diaspora. Naturally Israel comes to picture. Israeli economy grew in double digits only after the Oslo Accords in 92. Prior to that Oslo Accords Israel was mainly sustained through American aid. Now it has it’s own Silicon Valley around Tel Aviv. The analogy of Israeli example leads one to the following conclusion: Investors need to have faith in a future of a country. Without that no country will attract any sizable investment. What target market do you think advertising of Armenian tourism industry should be geared towards? Name one single sphere of tourism that Armenian can offer advantage over others. There is no single architectural structure that has a global significance. What should attract masses of tourists to Armenia? I am not talking about few tourist enthusiasts; I am talking about developing tourism industry. If one looks at countries that have successfully developed tourism industries, Italy, Greece, Egypt or Israel, the common denominator in all these countries is the existence of historical sites of global significance. Armenia does not have the natural resources to become a resort site. May be you see something I fail to notice. Boghos, local Armenian market is extremely small, and transportation costs price Armenian products out of world markets. Armenia should capitalize on resources it has a competitive advantage or can develop industries where it can sustain competitive advantage. I think Armenia can sustain long-term competitive advantage only when the transportation costs in that industry are minimal. Although Korean model of development gets bashed lately, but I am a big fan of choebols. Government should find industries, nurture them and prepare them for global competition. Local markets should be shielded from foreign competition at least temporarily. The fixed cost of establishing business is high in emerging countries, and they cannot successfully compete with established western counterparts, who do not have a lot of fixed costs and have developed distribution channels.

Interesting analogy Boghos, but allow me to give my outlook on Armenia business plan. Armenia lacks the climate, or world significant historic sites in order to attract tourists. Tourism industry will be limited to Diaspora Armenians. That figure does not increase 6 million. The government of Hrant Bagratyan unsuccessfully tried to promote the idea of Armenia becoming a financial center of our region. Armenia is too close to volatile Middle East and it has always had shaky relations with its neighbors. Even if Artsax conflict is solved, there will still be too much uncertainty in the region (Islamic fundamentalism in Iran, Arab-Israeli conflict, Kurdish problem). The only competitive advantage over its regional competitors Armenia has is the financial resources of Diaspora. If other businessman like Vache Manougian have enough confidence in Armenian economy and will bring credible names of the West to our country then development of financial sector is possible. Yet I don’t think it has a chance of becoming significant part of economy. The region is too undeveloped, and banking sectors usually thrive in developed and stable regions. I think Armenia has a great future in gem cutting and development of successful jewelry industry. It has the human resources and the capacity, which regional competitors lack. Also it can utilize the distribution networks developed by Diaspora Armenians. Another sector that I think has a great chance of development is the software development and telecommunication equipment industries. Despite the drainage of human resources Armenia still retains the educational institutions to replace the loss of human capital. The interest shown by companies like, Cisco, Nokia, Ericson and etc. is an indication for a bright future for this sector. The government should expand or at least retain funding to educational institutions in order to maintain the competitive advantage. The development of successful technology industry in Ireland through spending on technical schools should be a great example for Armenia. Development of energy sector looks promising. Armenia has the necessary infrastructure to become a significant player in regional energy market. I don’t think manufacturing has a great future in Armenia, whether it’s light or heavy industry. Transportation costs price Armenian products out of the market. If Naira is getting the McKensey office, then I want to get the Ernst & Young Cap Gemini group.

In Guggenheim it says he is an abstract surrealist. I don't know the exact name of one of his pictures, but it had name Sochi in it, it's posted in one of the most visible places in Guggenheim. Do Gorky and Kondinsky belong to the same artistic movement? Whatever museum I have seen Gorky's pictures have always been the same salon as Kondinsky. I was wondering whether there is any relationship or not?

Naira, your argument that democracy is a reality in West is a myth promoted by Western governments. The whole political elite is corrupted by special interests. It takes huge amount of money get elected, and people who sponsor the elected officials expect return on their investments. Examples of these are bluntly evident in US, (gun lobby, cigarette lobby, etc.) You are right people actually choose their elected officials, but that’s not such a positive thing. Remember that Hitler was elected also; do you think it was a right choice by German people? General populace is incapable of electing. It’s too naïve and dumb. That’s why there are political strategists who manipulate the public, with money obtained from special interest groups. A great example of manipulation of general populace are the presidential elections of Russia in 97, and the stupid “vibiray ili proigrayesh” slogan. A few months prior to elections Yeltsin had popularity only among 5% of Russians, and only in a matter of few month political strategists were able to portray a different image of Yeltsin. Democracy advocates rule of majority, which in respect ignores the concerns of the minority. In US swing vote obtains disproportionate power during close elections, thus ignoring the views of minority. That’s what happened in US. Right centrist has won the last presidential elections with the help of ultra right religious conservatives, and now we have Ashcroft as Attorney General, and left is being squeezed out. I find the constitutional monarchy the best model for governance. It gives stability to government and minimizes the affects of special interest groups. The monarch should have some real powers, not be a figurative persona as it’s in Great Britain.

The free reign of energy companies in San Diego area is driving local businesses to bankruptcy. I prefer to see Duke, Enron and others like them not to get paid their account receivables than see local businesses go under because of money hungry energy barons. Did anybody see the program on ABC yesterday about the energy crisis in California. It reinforced a lot of the points I was trying to get, which is according to Federal Commission (I think the abbreviation is FFEC, I am not sure), the prices charged by Duke and Enron were not fair. There have been some instances that the price for 1 Megawatt was $9,000. Before the crises according to NY times the price was $46. That explains why Enron and Duke are having such astronomical profits. They paid for Bush's election and now they are reaping the profits.

Who needs that independence if it's not improving peoples lives. After all the independent state should serve it's citizens not the other way around. In Armenia there is this joke going around. "Armenia is the most independent country of the world. Nothing is dependent on it."

An interesting article in the Opinion Section of LA Times about the education of our beloved idiot president. The Forrest Gump of Presidents By DREW LIMSKY I teach English and writing at various colleges in New York City. Many of my students overcome serious hardships to attend. Some work full-time jobs or care for young children; others have parents who are absent or ill, drug-addicted or in prison. The vast majority of my students complete their work and graduate. Just about all of them make better grades than George W. Bush made at Yale, but I doubt that any of them will go on to be president. They don't have the luck. You don't have to be an educator to be sickened by Bush's irreverent remarks at the Yale University commencement last week. "President Bush has explained his uncomfortable relationship with his alma mater as a distaste for Ivy League elitism," wrote one reader of the New York Times, "but what could be more elitist than bragging about how you napped through four years of college?" A writer to the Los Angeles Times, incensed at Bush's flip tribute to the " 'C' students,"--"You, too can be president of the United States"--observed, "I'm sure the Yalies who worked hard for their academic success were delighted to be reminded that Bush and Vice President Dick Cheney's microscopic collective in no way prevented them from riding into the White House on the shoulders of others." Trying to be modest, Bush instead came off as smug and spoiled in his commencement address. With tuitions skyrocketing, contempt for one's own college education is a luxury few can afford. When my students are dissatisfied with a grade, they beg, plead, complain and cajole. I don't think many of them smirk, because they know that, for many of them, the difference between academic success and academic failure is not, as it was for our president, the difference between a JD and an MBA, but the difference between a white collar and a job at Burger King. Bush could always afford to smirk in the face of his scholarly failings, because such a trifle as grades was never going to affect, much less determine, his future. His story was written by his name, his money, his family. He alluded to as much in his speech. Though his self-deprecating jokes about poor marks, snoozing in the library and booze-induced blackouts have gotten most of the press, perhaps even more troubling was his stated belief that "Life ....writes its own story. And along the way, we start to realize we are not the author." That's a breathtaking statement for the president of the United States to make. So many of the essays I assign my freshmen deal with overcoming adversity, and encourage them to rise to life's challenges and control their own destinies. "Circumstances don't create character," I tell my students, "they reveal character." In her famous essay "On Self-Respect," Joan Didion wrote that "the willingness to take responsibility for one's own life ... is the source from which self-respect springs." I think this message speaks to my students, but I'm not sure if Bush would appreciate it. He has not been the author of his own life. Circumstances allowed him to "fail upward" and retain his unshakable optimism. Circumstances led him to Yale, to wealth, to the presidency. Bush is a good-natured man because good things happen to him; like Forrest Gump, he is pulled along by good fortune, rather than by convictions or determination. Can you imagine an Al Gore or a Bill Clinton claiming that he is not the author of his life? Gore, like Bush, was a child of privilege, but he made a conscious decision not to rest upon or rely on that privilege; seeking to live up to his name, Gore has led a life of accomplishment because he elevated his self-expectations. Clinton grew up disadvantaged but managed to write his story with hard work and ambition, with his own choices, for good or ill. In light of the failed attempt to remove the former president from office, Didion called Clinton the luckiest man in America. She didn't know that President Gump was on the way. Drew Limsky Teaches at City University of New York. he Has Written for the Washington Post and San Francisco Chronicle and Is the Book Editor at Metrosource

DESPITE STRONG MACROECONOMIC PERFORMANCE, ARMENIA HAS NOT BENEFITED FROM COMMENSURATE JOB CREATION OR POVERTY REDUCTION YEREVAN, May 24. /Mediamax/. Despite strong macroeconomic performance, Armenia has not benefited from commensurate job creation or poverty reduction. Mediamax informs that this is said in the press release spread today by the World Bank Yerevan office concerning the approval by the WB Board of the new Country Assistance Strategy for Armenia on May 22. "Human capital has deteriorated through migration. This has had deleterious effects on the economy. The new CAS emphasizes the need to expand budget allocations to education, health and other," is noted in the press release. "We expect the government to emphasize facilitating private sector investment, and eliminating distortions, particularly corruption and red tape," Judy O'Connor, WB Country Director for the South Caucasus said. "We are especially pleased with the very constructive Investors Conference for Armenia held in New York earlier this month. The presence of both Presidents of Armenia and the WB emphasized the commitment of the government and the WB to making the private sector the engine of balanced growth of economy," Judy O'Connor noted.

Armenia's legal framework, and most of the laws are carbon copies of French laws. Even the constitution is very similar to French consitution. VAT, as you mentioned MJ, is an accepted form of taxation in EU countries. So I don't think the legal framework or VAT can be blamed for the failures. If it works in other countries why shouldn't it work in Armenia. I personally think it's the inability of state to implement the laws (that's a problem all 3rd world countries face). State is not strong enough to protect its interests against the interest of powerful oligarchs. So I think strengthening of state is crucial to development of economy. I think one other reason for such dire economy is the Armenian society. It wasn't ready for market economy. Everything happened so fast (independence, reforms, new currency) that people either lost most of their life savings (which could have served as an investment capital), or were literally forced to immigrate. I think gradually the society is learning the rules of the game. One think that amazes me is how can country sustain such macroeconomic activity for so long without any microeconomic growth. That's an anomaly. The tight monetary policy of Central Bank, curbs inflation, but as a result the country has an astronomical unemployment rate (mostly underemployment). I think if Central Bank can loosen the monetary policy more economic activity will promote growth. Current government has high hopes on foreign investments (the symposium in New York was supposed to generate interest in Armenian economy). Foreign investment can serve as a two edge sword (1995 crisis in Mexico was mainly a result of foreign capital flight, which was mainly in very liquid assets). If foreign investment is mainly in liquid assets, than a little scare will lead to a major capital flight. A region as volatile as Caucasus, instability is imminent. The example of Asian Tigers and China, where foreign investments are mostly in illiquid assets should serve as an example to current Armenian government.

MJ, I appreciate the fact that you took time to read parts from such a credible magazine as Economist. You keep saying that my facts are not right, but I’d like to point out that these are not my facts. They come from very reputable sources. I’d be more than happy to read publications that you find credible, which show your point of view. The reason I posted the link and tried to make a reasonable argument by pointing my sources, was to show my perspective of how current administration works. One thing I don’t understand is your ardent desire to close your eyes on their mistakes, and to justify their shortcomings. I might not have the academic credentials like you do, but I’d recommend you to have an open up your mind on other sources, and not discredit them without giving any reasons. Also, you said that some numbers that I provide (mainly 20-40%) are not my numbers. As an analyst I can attest you that using numbers provided by reputable sources is an acceptable practice in investment community. Guess what, as an economist I can point out that taxation is progressive, and by raising taxes to pay for rate increases helps common people who are in financial difficulty. That’s the only way state can shield its people from money grabbing of energy companies. It’s an indirect way of redistribution of income. The gap between haves and have-nots is increasing at a rapid pace. Something must be done to stop it. On the one last note, why do I surprise you. Can we stop name calling. We are here to have reasonable arguments.

Armenia has had a lot of success in its foreign policy and military, however, economically it has had great difficulties. What do you think are the main successes and failures of Armenian economy since independence.

I believe that you'd agree with me MJ if I said that Economist is one of the most credible magazines. The following link http://www.economist.com/displaystory.cfm?...story_id=624258 outlines the failed policies of our imcompetent president, that he tries to implement his failed policies in Texas on Federal level. Unfortunately it doesn't mention the failures of the "energy policies". Also, why do you attack the competency of a person who makes the counter argument, or challenge the validity of his/her resources. I am ready to provide all the resources that I mentioned and stand by my numbers (TIME is also one of the most reputable magazines and 20-40% conservation number was obtained from there). Lets go back to where the whole energy debacle started. The energy deregulation was signed by notorious Republican governer Wilson, who signed the bills into a law against public outcry, but with consant lobbying of oil companies. Governer Davis just protects public from high energy prices. If you carefully follow his policies you'd notice that he was ready to bail out both energy companies from bankruptcy, but P&GE didn't want to settle for it. Albeit the result was a bankruptcy. Now I will point out one of the companies that I used to cover SCE. Southern California Edison is set up as a holding company for Edison International, which is financially well diversified company. By setting up as a subsidiary, Edison International bought the upside of Southern California Edison's profits, which sends its profit to its parent. Yet when deregulation did not go as planned all of a sudden Southern California Edison was threatening with bankruptcy, and was asking for increased prices on electricity. These corporations know how to go after public's money. There is also an investigation with oil and energy providing companies on price gauging. Duke has even secretly agreed to settle it, but when the whole deal became public state bailed out of it. That's what free reign of oilmen and energy providers does to public, when energy and oil companies are left unchecked. In one of the recent interviews Dick Cheney was advocating for less regulation of industry and no federal intervention, but as experience showed in California regulation of energy sector works for public interest.

MJ, thanks for your kind words. Now when I am back in town from a long and exhausting trip I can reply to you. I haven't been in South East US. The most Southern place I have been is North Virginia, close to DC (although I plan to visit Florida soon). You asked me about my sources. Usually they are TIME magazine, Wall Street Journal, Financial Times (it's my favorite newspaper, and the only one I read daily), LA Times, NY Times, Business Week, Forbes and Fortune. I think you'd agree with me that these are all credible sources. The 20%-40% conservation number I got directly from last weeks TIME (you can check it yourself). So I wouldn't question its validity. You are right about my ideas being socialist. A lot of my coworkers used to call me that (and that's not a compliment in investment banks). I am a strong advocate for cleaner environment and social justice (meaning less disparity between rich and poor). I think social Darwinism is only applicable in third world countries, where they are in desperate need for investments (this is even applicable to our motherland). the biggest pollutants of the environment from the CO2 stand point of view are the people and the other animals, since we all inhale oxygen, and exhale CO2. According to the “anti-CO2” logic, we can propose to put limitations on the human reproduction, for example. MJ I think both us know what I mean by CO2 regulation. I am glad you didn't go far enough to claim that CO2 is very healthy. I think you'd agree with me that excessive CO2 levels are responsible for global warming. And it's really sad that the leader of free world is backing away from his campaign promises of CO2 regulations. Why are you such an ardent defender of an administration who defends only the interests of small part of the population (the ones that sponsored them to finance their campaign - mainly Texas oilmen, and big business). Today when I was reading Financial Times I was surprised to find out about their idiotic plans to abolish corporate taxes, and pass them on to people. Read the article below, and you will understand what I am talking about. O’Neill lays out radical vision for tax By Amity Shlaes in Washington Published: May 18 2001 Paul O'Neill, US Treasury Secretary, has laid out a vision for a radical reform of the US tax structure, including a sweeping revision of the Social Security - or public pension - system and abolition of corporate income tax and capital gains tax on businesses. In an interview with the FT at his Treasury office, Mr O'Neill espoused changes that would reach far beyond the legislation currently before Congress. As the Senate moved ahead with the Bush administration's initial $1,350bn tax reduction plan, which Mr O'Neill expects to be signed into law next Friday, he expanded on his previous piecemeal attacks on America's tax system. The present system was "an abomination" that required changes to its "very structure". " Not only am I committed to working on this issue, the President [George W Bush] is also intrigued about the possibility of fixing this mess," said Mr O' Neill. One of the most important moves, he suggested, would be abolition of taxation on companies. Corporate income tax, the main form of tax on US businesses, accounts for 10 per cent of federal revenues and has a top rate of 35 per cent. Among other controversial ideas, Mr O'Neill questioned the the guarantees the government provides for full public subsidy of senior citizens' health care and retirement programmes. "Able-bodied adults who have the ability to earn income have an obligation not to pass part of their own responsibility on to a broader population," he said. His remarks are bound to reverberate in Washington, where speaking about reductions in elderly care programmes has been taboo. Mr O'Neill's remarks reflect growing determination in the Bush administration to show its willingness to propose radical change to try to secure growth. Abolishing corporate tax would inevitably lead to higher personal income taxes, but Mr O'Neill believes such a move would reduce the overall tax burden and promote economic growth. Current corporate tax levels - and their administrative costs - were too high, he said. The system would work better if the government "collected taxes in a more direct way from the people, who were paying the taxes in any event". Mr O'Neill said simplification of the tax code would also improve US global competitiveness. "It would certainly make us more formidable if we had a simplification of this sort." Any increase in personal income tax would undoubtedly provoke strong voter opposition. Mr O'Neill, however, says he "absolutely" wants to eliminate corporate income tax. He also wants to do away with capital gains taxes on businesses, and indicated the administration was prepared to put this on a shorter-term agenda. It is highly unlikely that other members of the Bush administration share every aspect of Mr O'Neill's reformist visions. But the fact that one of the most senior cabinet members would lay out such a detailed and radical programme is a sign that the administration has not been deterred by opposition to its initial tax-cut plan.

MJ, I have to admit, you provide interesting arguments, which make a lot of sense (you basically preach social Darwinism, in contrast to my humanism). One thing I don’t understand is such a negative tone from you and your personal attacks. I thought the forum is for discussions, not personal attacks. I don’t think I have personally attacked neither you nor your intelligence. I really don’t appreciate the accusations of demagoguery brought against me. I cannot make any counter arguments when the opposing side is debating not only my views, but also my personality. So unless we can agree that it won’t get personal allow me to not bring my counter arguments. By the way in terms of me being outside of Los Angeles, what can I say I just got back from Hawaii? ALOHA!!!! I might have not traveled in half the places you have, but I have been in many parts of the world. By the way do you ever take a joke, and not take things so serious. Yes, South will rise again, and that’s not based on merit just observations.

MJ, I have never claimed to be an expert on anything. After all I am just a number cruncher not a policy maker. Yet that doesn’t take away my right to give my perspective on the policies of White House. I guess incompetence is a very subjective adjective so I won’t argue on that, but I will present my point of view on the matters discussed. Here is my perspective: First and foremost, instead of promoting conservation White House is promoting generation. A report by leading scientists, three years in the making, finds that a government led program of conservation could reduce demand anywhere from 20% to 40% (TIME magazine May 21, 2000). In addition his budget cuts federal research dollars for research into alternative fuels. Guess on whose interests in generation? They ease environmental rules on coal-burning power plants. You are an expert, unlike me, and you know that coal is the worst of fossil fuel for CO2 emissions. Our so smart president has also declared that CO2 should not be treated as a pollutant. So do you think that is a smart move? In terms of tax cuts. My economic analogy about tax cuts is the following. While the middle class may get some relief, with the rising energy costs the money saved on taxes will eventually end up in the pockets of energy barons. So what effectively is he doing, is transferring federal money to oil companies. Guess whose interest it is serving? I am sure you won’t argue that closing the gap between the rich and poor can be achieved through progressive taxing system, just like it’s done in Scandinavian countries. I am not proposing total equality, which was even not achievable in communist countries. I merely ask for measures to close the increasing gap between rich and poor. Unlike you, I don’t believe that “The mission of the government is not the elimination of this gap, but creating a climate of opportunity for everybody to materialize his/her opportunities to the fullest of his/her capacity.” Mission of government is to assure the happiness of its citizens. I think “pursuit of happiness” was in the Constitution of US. The Keynesian safety net is gradually being removed, while rich are getting richer and poor are getting poor. Government should not only create the opportunities for the talented and fortunate, it should also take care of not so fortunates. I think we have passed the stage of e economic development, where economic Darwinism is applicable. In terms of military spending. Do you think when cold war is over, and US as the only hegemon in the world it is threatened by others. Creating the missile-defense system not only significantly alters the balance of power in the world; it also unnecessarily wastes taxpayers’ money. Is this a new Star Wars Era? According to TIME, space based missile-defense system will cost $100 billion. Are we getting back to era of huge budget deficits? About Kyoto: I won’t claim that I am an expert on it too, because I am not. But I know some general facts, which I will try to reiterate. What does Kyoto protocol call for? Only for a 5 percent cut in emissions by 2010. It calls on industrial nations to cut heat-trapping emissions to below 1990 levels by 2012. The only reason EU countries are not adopting the protocol is because of US. Counselor Schroeder has said about this in one of his interviews. Bush administration argues that it’s not fair to US, without presenting any valid arguments. Since you are the expert MJ can you please educate the masses why is clean environment such a bad thing and Kyoto Protocol unfair. I guess with coming of Bush administration oil interests have taken priority over everything else. Also, I didn’t mean to argue about progressivism of South or East or California. I am sure South will rise again

Has US ever had such an incompetent president? He doesn't honor agreements (Kyoto), completely ignores the problems with global warming and doesn't miss an opportunity to give a tax cut to top 1% of population. It seems like if he had his way he will put an oil refinery in every corner. In addition he is not hesitating to build a space based missle defense system which could cost up to $100 billion. It's obvious that this guy is representing the special interests of oil, energy and millitary. Very sad but true. In the US the disparity between rich and poor is the greatest amongst the industrialized nations, so instead of trying to close the gap he is widening it. The self proclaimed moronic leader of "free world" thinks that by giving meager tax cuts to middle class he will be able to subsidize the rising energy costs. What a non sense. With an increase in prices of energy the small tax breaks that the middle class will get, will go directly back to the pockets of oil and energy industry. Has anyone paid attention to net income of oil companies. The profits of the largest gasoline retailer in US is up 44%. It seems like the backward South and especially the oil producing Texas will take over the progressive states in the East and California. How sad Hayastanciner jan, heto el dzer presidentic ek boxokum. Menk el merini dzern enk krak@ @ngel.

Turkey should be a case study in order to avoid creation of a dysfunctional society. Eighty years after creation of Republic it's still going through growing pains and instability. This is an interesting article from Economist and Financial Times that show in what dire situation is our western Europe. I just wish Armenian military learns its lessons and doesn't meddle in politics. Turkey’s real crisis May 16th 2001 From The Economist Global Agenda Turkey’s accident-prone government has grudgingly pushed through enough economic reforms to secure a new loan from the IMF. But the roots of the country’s problems remain political, not economic. THE IMF gave the go-ahead for its third bail-out of Turkey in two years on May 15th. Indeed, by one reckoning (the difference between overhauling an economic programme and starting a new one is, after all, a fine one), it will be the eighteenth time the IMF has ridden to Turkey’s rescue. To secure the latest $8 billion loan, Turkey’s normally sluggish parliament passed no fewer than nine important new laws in less than a month. But all these reforms will do little to address the underlying cause of Turkey’s endless crises: chronic political instability. Indeed, within the next few weeks, the Constitutional Court is due to rule on a prosecutor’s request to close the Virtue party, the main Islamist opposition group and the third-largest party in parliament. If it does so, Turkey’s markets might take fright once more, setting the stage for the nineteenth nervous breakdown. For the moment, however, all eyes are on Kemal Dervis, Turkey’s respected and popular economic tsar. The government recruited him from the World Bank in March, after Turkey’s second big financial crisis in four months caused the IMF’s previous stabilisation programme to collapse. For a time, that programme had gone well, as the government reined in its deficit, inflation and interest rates fell, and the economy boomed. But inflation, although falling, still exceeded the pre-ordained amounts by which the government devalued the Turkish lira each month (the so-called “crawling peg” , leading to a gradual overvaluation. That, coupled with worries about financing both the government deficit and a growing import bill, caused interest rates to start creeping up again. Several of Turkey’s banks, unprepared for this reversal and addled by corruption, failed. A timely loan from the IMF and a government pledge to sort out the banking sector staved off a run on the lira for a time. Yet by February, further market ructions forced the government to abandon the crawling peg—and with it its chief mechanism for quashing inflation. EPA Daunting times for Dervis The latest package tries to pick up where the last one left off. But this time around, the IMF has insisted on more legislation being adopted up-front, including an all-important banking law passed on May 11th, which includes particularly stiff, retroactive measures against the crooks who did so much to bring on the previous crises. Critically, the Turkish lira now floats freely, leaving Mr Dervis a little bit more room for manoeuvre. But not much: should he fail to hold the government to its austerity targets and thus keep the budget deficit down, the markets will doubtless get jittery once again. Economics v politics But the government—a creaking coalition of left- and right-wing nationalists and economic liberals—may not stay in office, let alone stick to its spending targets. With each crisis, it pulls itself together long enough to stave off total catastrophe, before reverting to internal squabbling. Both the past two big financial crises were triggered by rows within the government over corruption investigations. Signs of renewed complacency are already cropping up: just last week, one of the three coalition partners held up a crucial privatisation law, citing fears of a fire-sale of strategic assets to foreign profiteers. Mr Dervis himself admits that the chief failing of all the past IMF programmes was the lack of politicians willing to identify themselves with them, push them through and, by extension, take responsibility for their failure. Not one government minister has resigned over the collapse of the latest programme, despite unprecedented public protests at the ensuing economic upheaval. Indeed, Turkish politicians get away with behaviour that would be unthinkable elsewhere. One member of parliament died of a heart attack in January while being accosted by a group of his colleagues. Another, dubbed “the spinning top”, has switched parties six times to stay on the gravy train. A different party has topped the vote at each of the past four elections, as voters desperately search for a better alternative. Both the military and the president (who is a former judge with no party affiliation) regularly best all politicians in opinion polls. Many Turks dismiss them all as hopeless rascals. Reuters Is the star fading? But the truth is a little more complicated. Turkey’s politicians behave irresponsibly because the system encourages them to. The constitution, cooked up under military rule, forbids any attempt at “placing the government of state under the control of an individual or a group of people, or establishing the hegemony of one social class over others, or creating discrimination on the basis of language, race, religion or sect”—a fair definition of party politics. These restrictions are regularly invoked: the courts have banned some 35 parties over the past 40 years. Nor do the banned groups come from the extremist fringes of Turkish politics: Virtue, the party currently under threat of closure, won a fifth of the seats in parliament at the last election. Its precursor, Welfare, was the largest party in parliament when it was banned—just months after being harried out of government by Turkey’s meddling generals. Such constant upheaval has created a fractured and unrepresentative constellation of parties, and thus an unresponsive political system. Governments are always rickety coalitions, ever fearful of imminent elections and thus catering to the shortest of short-terms. Much of the business of governing is left to the bureaucracy, and much policymaking to the military. The present government had started making tentative steps to return power to the politicians, but the constant need to patch up the economy has distracted it. In the long run, however, the economy will not prosper without a more stable political system. From Financial Times Winning Turkey's trust Kemal Dervis fears his reforms could be derailed by vested interests, say Leyla Boulton and Martin Wolf Published: May 14 2001 18:29GMT | Last Updated: May 14 2001 21:49GMT When the International Monetary Fund approves a fresh $8bn bail-out for Turkey on Tuesday, it will be betting its money on Kemal Dervis, the new economy minister. The money is essential to the strategy he has drawn up, together with the IMF, to save his country from hyperinflation or default. Yet the 52-year-old former World Bank economist is the first to admit that his combination of tough fiscal discipline with radical structural reform could be derailed by what he euphemistically calls "vested interests and rent-seeking mechanisms". So why should anybody gamble on chances that he will continue to prevail within a three-party coalition widely believed responsible for the collapse of Turkey's previous IMF-backed disinflation programme? Mr Dervis responds that a lack "of co-ordination and of ownership" was the biggest weakness of the previous reform effort, which had been led primarily by civil servants, not ministers. He was offered his current position after persuading Bulent Ecevit, the prime minister, whom he had advised in the 1970s, that Turkey needed "one minister with an overall view", able to explain reforms and "ask for public support". The new minister's success in public relations is clear. Opinion polls suggest he is trusted by 59 per cent of the population. Mr Dervis attributes this support to the depth of the crisis. The twin shock of a surge in domestic interest rates to levels still exceeding 100 per cent and a 40 per cent devaluation demonstrated the perils of the "extreme interwovenness of politics and economics". "The general feeling is: let's fix this," says Mr Dervis. His structural reforms - ranging from privatisation to the strengthening of independent regulatory bodies - are intended to stop politicians from abusing state-owned assets in order to win votes and distribute favours to cronies. "This message of 'let's separate politics from economics, let's not have a rent-seeking system, let's fight corruption' is an extremely popular one," he claims. Mr Dervis cites the advice he received from a small farmer near the southern city of Antalya. "He said two things. One was, 'catch the people who wrecked the banks and put the money in their own pockets'. The second was, 'don't tell us things are fixed until they are really fixed'." The minister has received the support of several important constituencies, such as the armed forces. Even the business community, which previously sought "to obtain rent-granting licences or actions by the government", has backed Mr Dervis while continuing to insist on a reshuffle in the rest of the cabinet. The minister detects a generalised "willingness among people to put their personal agenda a bit in abeyance because they realise that if they persist, everything will fall apart". Yet success will depend heavily on the depth and duration of the recession, since the target of a primary fiscal surplus (surplus before interest payments) of 5 per cent of gross domestic product this year assumes that the economy will contract by no more than 3 per cent. Mr Dervis is optimistic that there will be a strong recovery. Apart from the competitive exchange rate resulting from the devaluation, other forces in favour of arecovery include the flexibility of Turkey's labour force and private sector companies. "If interest rates decline rapidly after foreign financing kicks in, which is what we hope will happen, a lot of blockages in the real sector can be resolved," says Mr Dervis. He expects a recovery in the second half of the year to be driven by tourism and exports, which were already up 10 per cent in dollar terms in April compared to the previous year. Nevertheless, "if the economy remains in the kind of contraction it is in now, if the growth rate is minus 6 per cent rather than 3 per cent, I think it will be hard to keep the fiscal targets," he concedes. This, in turn, will undermine confidence by making it impossible to reverse the dynamics of public sector debt, which is likely to hit 78 per cent of GNP by the end of this year - up from 60 per cent last year, largely because of the one-off cost of the bail-out of the banks. The more fundamental doubt is whether the government - described by one businessman in Istanbul as "mediocrities surrounded by non-entities" - will implement the reforms once the IMF has committed itself to new funding for Turkey. On this, the omens are mixed. Both before and after an interview with the Financial Times late last week, Mr Dervis was engaged in a more than merely symbolic battle with Devlet Bahceli, leader of the National Action Party, the second largest coalition partner, over the privatisation of Turk Telekom, the state-owned fixed-line monopoly. According to Turkish press reports, the ultra-nationalist Mr Bahceli accused Mr Dervis of representing the interests of the IMF rather than fulfilling his mandate, which was "to persuade the IMF" to support Turkey. Declining to discuss either the personalities or the parties arrayed against him, Mr Dervis says: "There is no doubt that the success of this programme will depend on the social-political dynamics of support. The biggest danger for this programme is that the vested interests will derail it. The degree of support is such that there is a good chance it will work and I believe that, quite rightly, the inter-national community as always is phasing its support, [because] it wants to see results." Mr Dervis for his part is adamant that he would quit at the first sign of any backtracking by the government. "I would resign. I would not stay." The fact that he has nothing to lose, as he himself puts it, enables him "to take risks that people who are desperate to keep their jobs cannot take". If his programme succeeds, it will transform the country. If it fails, it will be perceived as the failure of others. Either outcome could even open the way for a big change in Turkey's political landscape, including a role for Mr Dervis. Although he denies harbouring political ambitions, he has made no secret of his political views since returning to Ankara. "Many people said it was a mistake but I did declare when the press asked me that I am basically a social democrat," he says. "I always have been. I believe in the market economy but I also believe in the regulatory role of the state." The immediate question, though, is whether Turkey is able to become a modern European state.

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The interview of Vardan Oskanyan reiterates my earlier posting that Turkish foreign policy in the region is completely unbalanced. "TURKEY'S REGIONAL POLICY TODAY IS GRANDIOSE AND PRETENTIOUS" Armenian Foreign Minister Vardan Oskanyan's exclusive interview to Mediamax agency Last updated: April 28, 2001 - Mr. Minister, what is your assessment of Armenian-Turkish relations today? Is there any activity? - It is unfortunate, but true, that Armenian-Turkish relations today are - if we don't say non-existent - then completely unsatisfactory. I say unfortunately because today those relations could have been on a wholly different plane, had Turkey not adopted the wrong policy regarding Armenia in 1991-92. The fundamental obstacle for future Armenian-Turkish relations is our lack of trust in Turkey, as well as the fact that we are not hopeful that Turkey will become our reliable partner. Given the events of the beginning of the 20th century, Turkey had the opportunity, following Armenia's independence, to open a new page in the relations between our two peoples. However, by choosing today's policy - which is categorically anti-Armenian in its leaning - they further aggravated the distrust factor. Nevertheless, taking into consideration that we live together in the same region as neighbors, we are open to the possibility of improved relations, and we do take steps in that direction. Today, there is some mid-level official dialogue, there are contacts between representatives of non-governmental organizations, as well as businessmen. Despite the absence of bilateral political dialogue, we still think the process is positive. - Can we say that today, we are closer to establishing diplomatic relations with Turkey than 7 or 8 years ago? - It's hard to say whether we are closer or not. However, I would not say that Armenian-Turkish relations are worse than they were in the past due to our current policies. It is simply that the policy of the past - which avoided controversial issues in order to demonstrate good will, and make it possible for the Turkish leadership to display a more constructive approach toward Armenia and establish the normal foundations for the development of relations - was not fruitful. The advantage of our policy is that today, Turkey has an even greater interest and need to enter into a dialogue with Armenia; the international community, and the US in particular, is making even greater efforts to see that the two countries explore and resolve their common issues through dialogue. The other good thing is that by raising the issue of the Armenian Genocide publicly, broad-based discussions are taking place in Turkish society, which necessarily means that the Turkish public is becoming aware of Armenian perspectives and approaches. - What then is Armenia's reaction to Turkish Foreign Minister Cem's proposal that an Armenian-Azerbaijani-Turkish meeting take place to discuss the resolution of the Artsax conflict? When that suggestion was made, representatives of Armenia's Foreign Ministry announced that Yerevan was negatively disposed toward that proposal. Some time later, in a meeting with Kahan Soyak, you stated that "Armenia considered the Cem proposal with interest." - Let me make two corrections. First, the proposal suggested a trilateral - Armenia, Azerbaijan, Turkey-meeting not to address issues relating to the Artsax conflict, but regional issues. And second, Armenia did not react negatively to the proposal. Rather, it was deemed impossible since there are no diplomatic relations between Armenia and Turkey, since the latter continues to carry out a blockade of our country and has adopted clearly pro-Azerbaijani positions. We believe that these circumstances do not allow Turkey to serve as even a neutral mediator; thus any meeting would be ineffectual. -How do you explain the recent and frequent statements by US officials, that in the resolution of the Nagorno Artsax conflict, Turkey has no role to play as mediator? Do those statements carry a message for Turkey or Armenia? - Here, we should distinguish between Turkey's role of mediator in the negotiations process, and Turkey's possible indirect positive input toward the speedy resolution of the conflict. I've just elaborated on its role as mediator. For obvious reasons, they cannot have any positive input into the process. But until the issue is resolved, Turkey can - through its positive engagement, that is by removing the blockade, and by adopting a more even-handed approach regarding the conflict - expand Armenia's security options, decrease our concerns about certain issues, and thus make possible a compromise solution of the conflict. In other words, as a result of Turkish policy today, Armenia is forced to insure itself against the possible deterioration of Armenian-Turkish relations, thus placing greater demands on security. We are convinced that if over the last decade we had had good-neighborly relations with Turkey - independent of the existence of the Nagorno Artsax conflict - today, the Nagorno Artsax conflict would either have been resolved, or we would have far greater opportunities to find a quick solution. - In your opinion, doesn't the international campaign for Genocide recognition seek to exclude Turkey from the Nagorno Artsax resolution process? - That is not our objective. Even though we are convinced that Genocide recognition and the Nagorno Artsax resolution are on different planes, still, the two issues are fundamentally related as are the processes. For example, Turkey's recognition of the Armenian Genocide can have serious positive consequences on security guarantees for the people of Nagorno Artsax. In any case, we think that that the Nagorno Artsax conflict is about the right of the people of Nagorno Artsax to self-determination, and the recognition of the Armenian Genocide aims to reestablish historical justice, and this has not only pan-Armenian significance but also universal. -Is it possible that Turkey's extreme emotional response to the fact of international recognition of the Genocide may have serious consequences for Armenia? - It is possible there may be certain additional problems, but not serious consequences. Today, the Turkish blockade has already ceased to be effective in terms of adversely affecting Armenia's economy. During these ten years, Armenia has accommodated itself to the conditions created by the blockade. I believe that the Turkish threats against us would have been more effective if borders had been open during these last eight years. The potential closing of open borders would have given us greater pause than the non-opening of already closed borders. - What are the chances that the US House of Representatives will return to the matter of Genocide recognition, and what results might be expected? - I'm certain that this year, too, the Armenian community will bring that issue to the Congress. It's difficult to predict the results. In the final analysis, the decision of the French Senate will serve as a positive example to the US Congress and other countries' parliaments. The lesson to be learned there is that Turkish hysteria lasted all of two weeks. And today, Turkey is requesting French support in dealing with the international financial organizations in order to come out of its economic crisis. After all, Turkey is far more dependent on the G-7 countries, than any one of them is on Turkey. - Don't you think that Armenian public opinion is not ready for normal relations with Turkey, and that this can be a serious obstacle that official Yerevan is overlooking? - First let me say that we view with great seriousness our public opinion, not just regarding Turkey but all of our foreign policy. As for our relations with Turkey, I believe that a majority of our population desires normalization of relations between Armenia and Turkey, so long as that does not come at Nagorno Artsax's expense, or at the cost of defending our historic and current rights. - Today, Turkey is in a serious economic crisis. Might that circumstance lead it to somewhat modify its regional policies? And, is it possible that Turkey's crisis may affect the economies of the region? - Unfortunately, Turkey's regional policy today is grandiose and pretentious.That is rooted in their search to establish their identity and other issues.Today, Turkey has serious problems with most of its immediate neighbors. This policy was clearly evident in Turkey's reaction when France and other countries' parliaments began looking into the matter of Genocide recognition. And because such behavior has deep roots, we don't believe that today's crisis will lead to a more unassuming approach in their regional policy. Especially since the cause of this economic crisis is political, and at its base is the battle between those who wish to leave behind such traditions and those who wish to continue them. In any case, that economic crisis can affect only those countries which have serious economic ties to Turkey, and especially if they have large quantities of imports or exports. - Notwithstanding the recent statement of the Georgian Foreign Minister made while he was in Armenia recently, military and political cooperation between Ankara and Tbilisi is growing. Especially taking into account the announcement already made that the Marneuli military airport is being used by Turkish planes. In the absence of Armenian-Turkish relations, does such Georgian-Turkish cooperation potentially become destabilizing? - We have frequently said that Turkish-Georgian military cooperation concerns us and, we believe, can fundamentally disrupt the regional equilibrium.Armenian-Georgian relations are the link which serves as the fundamental guarantor of the region's, albeit fragile, stability, and which does not allow the establishment of divisive lines in the region. That equilibrium may be disrupted if the Georgian-Turkish military cooperation deepens, and if Georgia gradually and even unnoticeably becomes more and more dependent on Turkey, and perhaps unknowingly, is pulled into the formation of a Turkey-Georgia-Azerbaijan axis, thus becoming involved in the Turkish and Azerbaijani policy to isolate Armenia.

Turkey can not afford to switch from West to Russia. Its economy is too weak and too dependent on Europe. In addition, it’s a member of NATO, and has contractual obligations to its partners. Russia is too weak and in a foreseeable future can not be a competitor to West. How can Russia be a superpower if the GDP of Russia is almost the same size as the GDP of South Korea? It can not afford to sustain most of the military complexes, and in a decade or so most of its military arsenal will be considered obsolete. So pro-Russian orientation is not an option for Turkey. The only way it can change its pro-western orientation is if a revolution similar to Iranian occurs in Turkey. Outside of a few cities in the West (Istanbul, Izmir and Ankara), most of the Turkish public is still religious and can easily be manipulated by mullahs. With economic struggles continuing people will eventually get dissatisfied of the status quo established by Ataturk eighty years ago, and will opt for a change. Religious and nationalist groups can easily manipulate the dissatisfied Turkish public. West can be portrayed as a scapegoat for their troubles, just like it’s done in Iran. I think it will work to the advantage of Turkey to have normal relations with Armenia. Turkey is not a strong country as most of Armenians think. It’s extremely weak and unstable (the military has overthrown the president six times in the last forty years). The only thing that keeps it together is its ability to leverage its geographic location. With the collapse of Soviet Union it has lost some of that significance. If peace is established in the Middle East then it will become even less significant. Normalization of relations with Armenia will help Turkish economy to some extend. Eastern Anatolia is underdeveloped and is in shackles. By opening the borders it will enable the flow of products and will boost the development of Eastern Anatolia. Opening of Kars-Gumri railroad will make transportation of Turkish goods to Central Asia and Transcaucasus cheaper. The development of Eastern Anatolia will narrow the gap between Eastern and Western Turkey. I personally think Turkey is currently a prisoner of its short sighted policies of early 90’s. Unlike Armenia it’s foreign affairs are not balanced.

The discretionary case by case rulings applied in Jewish Holocaust can be applied to Armenian Genocide also. When Turkey was brought to its knees at the end of World War I; as a retribution for Genocide Armenia was awarded by the Treaty of Sevres and 87 thousand square kilometers of land. I guess we did not use the end of World War I to our advantage, and lost more lands (Kars, Ardahan, Surmalu). Now it’s too late to think about missed opportunities. Turkey is in financial disaster so we can not expect any financial retributions from them. Second of all we need an economically stable Turkey as our neighbor. Hefty fines on Turkey will completely cripple Turkish economy, make Lira even cheaper, and will flood Armenian market with even more Turkish products. The only positive aspect for recognition of genocide is reconciliation of relations between Turkey and Armenia. I’d much prefer to see relations between Armenia and Turkey normalized. At least it has to be similar to relations between Greece and Turkey. At this stage in international affairs world community is reluctant to see change of borders. (Kurdistan and Kosovo are great examples of this). The normalization of relations between Armenia and Turkey will make Turkey less pro Azeri and will help in pro Armenian solution of Artsax problem.

Armenia Fails to Sell Energy Grid, Says Energy Minister YEREVAN, Apr 22, 2001 -- (Agence France Presse) Armenian authorities have failed to sell off the state-held energy distribution network due to a lack of bids, according to energy minister Karen Galustyan. "The tender's participants did not make any offers, so I must declare that the tender did not take place due to lack of bids," Galustyan announced Saturday, adding that the result had come as no surprise. "The participant companies were in doubt all this time, and had not played an active part in the process for months," the minister said. U.S.-based AES Silk Road Inc and Spanish Union Fenosa Acex had been among the companies initially interested in the energy grid. Armenia had offered investors 75 percent of the shares in all four of its energy distribution grids. The European Bank of Reconstruction and Development (EBRD) holds 20 percent, and the state would retain five percent under the privatization proposal. "We regret the fact that our energy distributor networks, which are among the best in the former Soviet republics, did not attract investors," Galustyan said. Privatizing the energy grid was vitally important for Armenia, he added. However, protesters gathered near the energy ministry greeted the announcement with a round of applause. Over the past month, thousands have protested the impending sale in rallies organized by dozens of political groups and organizations. (© 2001 Agence France Presse)

I don't understand what does one's ethnicity have to do with dating or being friends. Do you guys ask about person's political believes when you go out? Is it that important to you? Relationships and friendships are based on personal level, and I think people should leave political believes or ethnicity out of it. I personally don't care what are my friends' political believes, be it an Armenian genocide, or anything else. Everyone is entitled to their opinion. I personally wouldn't mind dating a Turkish girl. In fact back in my college years I used to go out with one (blond, blue eyed Turk from Istambul).

Everyone has his / her definition for exciting. I believe life in US is extremely exciting, especially in huge metropolises like New York, San Francisco and Los Angeles. Armenia is a fairly small country and life is monotonous at times. You can go to Sevan and Tsaxkadzor only so many times. The cafés and bars are really nice but they are just average by Western standards. In US or Europe there are variety of activities that you can be preoccupied with. In Southern California there are a lot of art galleries for art lovers in West Los Angeles / Westwood area, one can go to Getty’s in Westwood or Norton Simon museum in Pasadena or LACMA to get familiarized with the greatest artworks. If one is into outdoors rollerblading in the beach is one of the greatest activities. Occasional catching of NHL or NBA games is also very exciting at glamorous Staples Center (especially when Kings are winning). For people who like ice-skating there are a few ice-skating rinks. Nightlife is booming in LA especially along the Sunset Strip (Good Bar, Sky Bar, Dublins, etc). If one is into concerts there a lot of world class musicians visiting Los Angeles (I got tickets to U2 concert in Anaheim Pond ) Or if one is tired of Los Angeles he/she can drive to San Francisco, Santa Barbara or to Las Vegas for the weekend. The bottom line is it’s up to a person to make his / her life exciting. If one has his / her career straightened out it’s easy to make it exciting. Overall you will never get bored in Southern California.

There was an interesting article I came across in UC Berkeley Near Eastern Studies departmental newspaper. Here is the link http://ist-socrates.berkeley.edu/~bsp/cauc...ter/2000-09.pdf