NKR STATE BUDGET TAX INCOMES EXCEEDED PLANNED INDICES

‘’The considerable growth of cash receipts to the Nagorno-Karabakh Republic state budget has been mainly provided at the expense of the growth of the tax incomes – Value Added Tax, profit tax, income tax, trade tax, fixed tolls’’, the Head of the State Tax Department under the Nagorno-Karabakh government Hakop Kagramanian stated in an interview with Azat Artsakh newspaper, REGNUM Information Agency reports.
In his words, the fact that the VAT has increased by 85, 1 % as compared with the last year is conditioned by the growth of GDP, tax income, while the growth of the trade tax – by strengthening the control: as a result of the inspections 400 millions additional tax obligations were proposed. In 2006 the state budget’s tax incomes exceeded the planned indices by 783 millions 850 thousand drams.
No drastic changes have been provided in the tax policy current year.

Karabakh conflict emerged from Sumgait ethnic cleansing
10.01.2008

/PanARMENIAN.Net/ The ethnic cleansing in Sumgait marked the beginning of the Karabakh conflict, Armenian Foreign Minister Vartan Oskanian told a news conference in Yerevan.

Reminding about the 20th anniversary of Sumgait pogroms, the Minister said, “Ethnic cleansings were carried out in all Armenian-inhabited regions of Azerbaijan. The events in Sumgait proved the necessity of Karabakhi people’s struggle for independence. We should remind the international community about February of 1988.”

February 27-29, 1988 Azerbaijan, taking advantage of the USSR leadership’s indifference, committed mass pogroms in the town of Sumgait. By official data, 32 Armenians were killed, hundreds wounded. The survivors fled to Armenia. Some 20 thousand Armenians used to live in Sumgait before the pogroms.

Karabakh Emerging: Is stable economy possible in an unrecognized state?
By Naira Hayrumyan
ArmeniaNow Karabakh reporter
Every year after harvest, more cars, mainly old German-made Opels costing about $5,000, appear in Karabakh. Having sold their yield, local land-owners are eager to spend. The lucky ones buy apartments.

Relative economic stability has been established in Karabakh 13 years after a ceasefire was signed. Most of the buildings ruined in the 1991-1994 war have been restored, and unlike other places in Karabakh, the capital Stepanakert does not seem to bear the traces of the war at all. Wages and pensions have been raised in the past several years, new houses have been built and new jobs created.

In more than a decade after the war, Karabakh finally seems to be recovering
But it is very difficult for the small country with a population of some 130,000 to survive in conditions of the blockade imposed by Azerbaijan, especially in its status of an unrecognized state.

Experts say that if it were possible to attract foreign investors to Karabakh, the country’s economy would have shown a more dynamic development even in conditions of a total blockade by Azerbaijan.

“Investors do not want to invest money in Karabakh because it is a high-risk zone,” says Ruzan Mangasaryan, Dean of the Faculty of Economy and Law of the Artsakh State University, candidate of economic sciences.

“Besides, the uncertain status of Karabakh, its being unrecognized is becoming a big obstacle for cooperation with international organizations and banks. Today, not only international programs are not being carried out in the republic, but it is impossible to make use of the programs being implemented in Armenia by the United Nations, the World Bank, the European Bank for Reconstruction and Development and other donors.”

Today, Karabakh is linked with the outside world only with a single motorway – Stepanakert-Goris. Karabakh has had no air, railway or any other link since 1992. It considerably complicates the country’s economic development and increases the cost of exported and imported products.

But experts also point out that Karabakh itself needs new reforms. They are sure with a better organization, proper tax and credit policies of the authorities, higher economic growth would have been possible.

“The faulty and imbalanced tax system has a negative effect on the country’s economic development,” Mangasaryan says. “Under such conditions entrepreneurs try to evade taxes in every possible way. This results in a ‘double accountancy’ and passage to the shadow economy. New laws, internal instructions are issued almost every day and the entrepreneur is the last one to know about them, which is an impediment to entrepreneurial activity of businessmen.”

Levon Hayriyan, who lives in the village of Mets Tagher of Karabakh’s Hadrut region, has his own opinion on how people should survive in conditions of the continuing blockade. Hayriyan says that people cannot wait until politicians settle the conflict and the authorities get wiser and start reorganizing their own economic policy.

“People themselves should look for different ways to earn their living and maintain their families,” Hayriyan says.

“During the first post-war years, in 1995-96, the problem of bread procurement was very acute. Then everyone began to sow wheat. The state also supported the land tenants. As a result, Karabakh managed to provide itself with grain. Then people got an opportunity to expand their business. And then I decided to plant a vineyard. I had to wait several years for the yield. But we have nowhere to hurry, don’t we?” Hayriyan, 46, says. “Patriotism is not a lofty word. It is creating opportunities for people to work and live dignified lives in their land.”

It is a good sign that Karabakh people, who had sown grain for many years, have started to engage in vineyard-growing. It means that people are ready to wait several years for the yield, as a vineyard gives first produce only five years after it is planted.

The government of Karabakh plans to allocate 1.4 billion drams (about $4.6 million) for the development of the agricultural sector this year. Processing mills and milk reception points will be constructed in several villages.

Today, Stepanakert has a population of 50,000. The population of the whole Karabakh, according to the data of the 2004 census, is 137,500 people. The 2008 budget of Karabakh provides for 49 billion drams ($162 million) in its revenues. Karabakh will earn 19.5 billion drams ($64.5 million) itself – taxes, transfers, turnover from capital. Armenia will extend 26.7 billion drams ($88 million) in the form of an interstate loan. (Some $10 million of deficit the government will cover through the remainder from the 2007 budget.)

Karabakh boasts only three large enterprises, which are the main taxpayers. These are the Drmbon copper mining and processing plant, the Karabakh Telecom company and the Artsakhenergo closed joint stock company. Local production mainly satisfies the population’s needs in grain and grapes. All other products and consumer goods are imported. Therefore, commerce and customer service are profitable.

The average pension in Karabakh in 2008 will be raised by 60 percent and will make 23,000 drams ($75), but even in this case it will not reach the minimal consumer basket of 39,000 drams ($130).

Arkady Arzumanyan, a 73-year-old resident of the village of Togh in the Hadrut region, is a former village school headmaster, a father of four children. One of his sons was killed in the war. Together with his other son he currently lives in the neighboring village of Mokhrenes where his son works as a school teacher.

“I live with the family of my son. Our life is not bad, but in order to secure such a minimum, we need to work hard. We cultivate land, we have wheat, a kitchen garden, we also have livestock – cows, chicken,” Arzumanyan says. “I think that when (if) Stepanakert has a population of 200,000, the situation of villages will be improved – there will be a sales market for the produce.”

“We have produce, but it gets rotten in the yards. There are no processing enterprises, nor procurement centers. The state must think about it,” he adds.

Wife and husband Ofelia Stepanyan and Ashot Barseghyan are teachers who moved to Karabakh from Yerevan. It is the third year that they work in the school of the village of Jivani in Karabakh’s Martuni region. It is a village abandoned by the Azeri population where Armenians settle according to a state program. The village is almost destroyed; houses are being built here due to state funds.

“Of course, conditions here aren’t enviable, but you can get accustomed to them. The salary is enough for a small family. Gradually, we are getting back on feet. Besides, it is always difficult in the beginning,” Stepanyan says.

Population Promotion: Nagorno-Karabakh residents have good reasons to marry and have children
By Naira Hayrumyan
ArmeniaNow Karabakh reporter
The Government of Nagorno Karabakh, formed in October 2007 after the presidential elections, set as a main task the re-population of the undeclared republic.

More than 2,000 children were born in Karabakh in 2006.
To encourage increasing the population, currently at about 137,700, the government now offers 500,000 drams ($1,650) to any family upon the birth of its third child. A bank account will be also opened with a deposit of the same amount [500,000]. A lump-sum payment of 700,000 AMD ($2,310) and an equal deposit will be offered upon the birth of the fourth child.

Around the time conflict with Azerbaijan began, Karabakh had a population of 189,000 (71 percent of which were Armenians).

The demographics of the country are a matter of concern to both the authorities and the population. The country’s new administration has allocated significant funds in its 2008 budget for raising both natural and mechanical increment. Sixty three percent of the budget (49 billion drams-$162 million) is allocated to the social sector and mostly will be spent on the demography promotion programs.

A number of programs aimed at stimulating natural increment have been launched to assist young families [newlyweds]. According to NKR Minister of Social Affairs Narine Azatyan, 450 million drams ($1,5 miln) of the 2008 state budget is allocated to the assistance to young families. This means that in 2008 1,500 young families will receive 300,000 AMD ($1,000) each.

In 2006 827 marriages were registered, against 751 in 2005.

“We wanted to get married last summer, but we were told that in 2008 the state will give 300,000 ($1,000) AMD to newlyweds,” a resident of Stepanakert Davit Petrosyan told ArmeniaNow. “We decided to wait some more. We won’t have a wedding party, the money is just enough for a trip to Cyprus.”

According to the budget project, child benefits and those for new mothers will also be increased. If before, only working mothers were given parental benefits, starting 2008 all new mothers will receive benefits of 115,000 drams ($380).

For multi-children families other benefits as well are envisaged including compensation for electricity bills (1,200 drams, $4 per each child). For the families with 6 or more children the state builds houses.

Marat Mazulyan, a resident of Vaghazin village in Kashatagh region of Karabakh, has 11 children. On the New Year’s Eve Minister Azatyan visited Marat. She brought presents. As Marat says, the presents came very opportunely- the family had a really festive New Year.

Mazulyan came to Vaghazin from Arakhish village of the same region, because there wasn’t a school there. For now he is mostly concerned about the house he bought 3 years ago for $700.

“It’s in a very bad condition: no floors, no ceiling,” he says. “I have turned to the regional administration body; they gave me some money for the repair. The rest would have to be done on my own. My only hope is my beehive. I’ll be enhancing slowly, maybe in a couple of years I’ll be able to buy a car. It’s impossible to do without a car here,” says Marat and adds that he is not going to leave this village.

Mazulyan leads a family of 13.
Multi-children families get assistance from NGOs as well. For example, Menk (We) NGO implements settlement projects at Kashatagh. The new project is called Apaga (the Future), and within its framework in 30 villages in the north of the region 200,000 drams ($660) is given to families when their first child is born, and 250,000 ($830) for the second child. The President of Menk Tigran Kyuregyan says 900,000 ($3,000) has already been given to families.

The state is planning to ensure population increase through a settlement program. The program is carried out all throughout Karabakh.

Serzh Amirkhanyan, Head of NKR Department on Migration, Refugees and Immigrants, says that in 2007 within the framework of the settlement program 67 houses were built in Karabakh and 23 restored. Eight hundred million drams ($2,667,000) was allocated to immigrants for house purchasing. Two houses were bought in Askeran and Shahumyan regions for the teachers having moved to Karabakh.

“Founding the department on migration in 2003 our goal was to strengthen the frontier regions of Karabakh. Over 500,000 Armenians left Azerbaijan during the conflict. Many of them settled in CIS countries. Our goal was to stimulate those people’s return to Karabakh, provide them with places to live and finances. As of today 45 populated areas are included in the program, and every year state- funded houses are built in each of them,” says Amirkhanyan.

He stressed that 20-30 families have filed applications for settling in Karvachar. Here from 8 to 10 houses are built annually, but there are unsolved problems with infrastructure. According to Amirkhanyan, the funds allocated to the settlement program have to be at least doubled. The state budget allocates up to 1 billion drams (about $330,000) annually. Amirkhanyan thinks that private funds have to be raised for this purpose as well.

The general opinion is that the re-population effort is carried out too slowly.

“The settlement policy is our weakest part,” says Vahram Atanesyan, the Head of NKR Parliament’s Standing Committee on Foreign Relations, deputy elected from Kashatagh. “Half-ruined houses slowly fall apart; building materials are immediately taken away and sold. They speak about the need to recover infrastructure, but at the same regions’ old water pipes are dismantled and sold out.”

In 2006, in Karabakh 2,102 infants were born; natural increase made 867 people. In 2007, 241 families have moved to Karabakh for permanent residence; the settlement program made 445 people.

11/01/2008
OSCE MINSK GROUP CO-PRESIDENTS ARRIVE IN ARMENIA IN JANUARY 15

Today Vladimir Karapetyan, the press secretary of the Ministry of foreign affairs announced that it is possible OSCE Minsk group co-presidents arrive in Armenia in January 15. According to him all the group of the co-presidents will visit Armenia.
He said that their visit was a beat vague only because of Robert Kocharyan’s private visit to France.

The co-presidents are going to meet with the authorities, and present NKR antagonism problems discussed in Madrid.

According to the Azeri media, the group of the co-presidents arrives in Baku in January 13.

great deal!
Olympic Games 2016 To Azerbaijan, Nagorno Karabakh To Armenia

Armenia and Azerbaijan are in long dispute over the Armenian enclave of Nagorno Karabakh. However, international community, Armenians and mediators' helping Azerbaijan to host 2016 Olympic Games could help to resolve the conflict quicker, through peaceful means. Azerbaijan is better off with Olympic Games, the money, attention and tourism that it brings than with Nagorno Karabakh, which is going to be like an investment sink.

Therefore; the plan should be Azerbaijan gets 2016 Olympic Games, Armenia gets Nagorno Karabakh, The world gets PEACE. This is a great deal.

Azerbaijan is likely to bid for holding the summer Olympic Games 2016 in Azerbaijan. The members of the Black Sea Economic Cooperation approve Azerbaijan’s intention except for Armenia. Azerbaijan’s likelihood may actually mean two things. First, Azerbaijan will not bring into being its threat to use force to return Karabakh until 2016 because in that case our neighbor, as well as we, but also our neighbor would be busy with planning military actions or planning reconstruction of the economy in 2016.

On the other hand, if Azerbaijan makes an Olympic bid for 2016, it perhaps thinks that the peace agreement on the settlement of the Karabakh issue will be signed by 2016 to set down de facto peace in the region in an agreement, without which it is pointless to expect that the members of the IOC will vote for holding the Olympic Games in Azerbaijan.

There is still a lot of time till 2016, and perhaps the prospect of signing an agreement is quite realistic. In addition, the Olympic Games may favor that, and also Armenia, strange though it may seem. What is the problem? Azerbaijan, which expects to host the summer Olympic Games, may even soften its stance on the Karabakh issue to sign a peace agreement and get a chance to organize the Olympic Games. After all, it is real money, and as long as the oil factor is “on horse”, Azerbaijan would like to make use of it. Ilham Aliyev will certainly compare the billions of dollars of the Olympic Games and the bugbear of Karabakh, and will certainly try to persuade his people that Azerbaijan can do without Karabakh but not without the Olympic Games. Meanwhile, it will be easy to persuade because the Olympic Games, like Sochi showed, is “opium of the people”. The expectations may infect the public with enthusiasm so that it will not want to hear anything about the problem of Karabakh but will gladly vote for prosecution of mentioning Karabakh because it hinders the economic development of the country.

In this sense, it is not clear why late last year the Armenian parliament voted against Azerbaijan’s initiative which was approved by the parliamentarians of the countries of the Black Sea Economic Cooperation in Georgia. It seemed that not everyone should have been for and Armenia against but the contrary because everyone may envy Azerbaijan, while we have no reason to envy since we took everything in 1992-1994. However, the thoughts of the Armenian parliamentarians are inexplicable, perhaps more than God’s ways. It is also evident that it is the approach of the Armenian government because the parliamentarians must have phoned Yerevan from Georgia, either to the speaker of the National Assembly who must have phoned the president, or directly the leader of the majority party to ask what to do if they have to spell out a stance on holding the Olympic Games in Azerbaijan. Perhaps there is no need to guess the answer because the Armenians parliamentarians who voted against holding the Olympic Games in Azerbaijan would hardly dare to oppose to the government of Armenia. Meanwhile, not only Armenia should have agreed but also could lend a hand to Azerbaijan.

For instance, the Armenian government could reach agreement with Aliyev: if he uses all his potential to lobby the independence of Karabakh in Azerbaijan and in the world, Armenia will use its potential to lobby Azerbaijan’s intention to host the Olympic Games.

No doubt, both Armenia and Azerbaijan will consider this option as absurd, if not high treason. Perhaps, however, this way of thinking is the reason why the two countries have achievements in “high treason” rather than state building. However, we should not forget about the co-chairs who may do something with their new shuttle. They ran out of imagination at some point, to the degree that they announced about it. However, it is not fatal. Simply it is everyone’s duty who wants to have the Karabakh conflict resolved and the state of Karabakh recognized, to help the co-chairs regain their imagination through new proposals and components.

HAKOB BADALYAN - Lragir.am

6/01/2008
NEGOTIATION TO BECOME TURNING POINT WHEN KARABAKH PARTICIPATES

“Once more we proved our commitment to Nagorno Karabakh conflict peace settlement,” NKR President Bako Sahakyan said late January 15 during the meeting with the co-chairs. He informed that the co-chairs presented general approaches by the Armenian and Azerbaijani president and “proceeding from those opinions we may conclude that there are some points that do not stem from the interests of Karabakh people.”

In the words of the president, criticism was voiced during the meeting against the statements made by the Azerbaijani leadership which may not contribute to peaceful settlement of the conflict. “Our disposition has stayed unchanged: Karabakh security with all the demonstrations stemming from it may not be traded,” NKR leader noted.

In the opinion of NKR president, the year 2008 will become a turning point only in case Karabakh gets involved in the negotiation process as an equal party. ''However, we have also stated that we are interested that Armenia continues participating in the negotiations because it will contribute to the preservation of current peace,'' he said.

YURY MERZLYAKOV: “KARABAKH SHOULD BE INVOLVED IN THE PROCESS”
[12:56 pm] 16 January, 2008

After a meeting with NKR President Bako Sahakian, OSCE Minsk Group Co-Chair Yury Merzlyakov (Russia) said that an agreement was being worked out between the conflicting sides on the main principles of the Karabakh conflict at this phase of negotiations.

“Now it is still impossible to find a mutually beneficial solution. However, this year the main principles of the Karabakh conflict resolution can and must be agreed upon,” he said.

After reaching an agreement they will draft the text of the agreement. I am confident that no progress will be made unless the NKR is involved in the process. The agreement is impossible without Nagorno Karabakh, since it refers to the life of the Karabakhi people.” Merzlyakov said.

French Co-Chair Bernard Fassier noted that there is hope that the year 2008 will become decisive for a breakthrough and accomplishment of the process of reaching agreement on the main principles. He informed that during the visits to Baku and Yerevan the Co-Chairs raised the question of how to involve representatives of Nagorno Karabakh in the negotiations, karabakhopen reports.
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Bako Sahakian: NKR security in all its manifestations cannot be speculated
16.01.2008 16:06
/PanARMENIAN.Net/ On January 15, the Co-chairs of the OSCE Minsk Group on Nagorno Karabakh conflict settlement, Bernard Fassier (France), Matthew Bryza (U.S.) and Yury Merzlyakov (Russia) arrived in Stepanakert to meet with NKR President Bako Sahakian.

“Today, we again confirmed our adherence to a peaceful solution to the problem subjecting to criticism the bellicose statements of Azerbaijan’s political leadership which cannot further the conflict settlement”, the NKR President said after his meeting with the mediators.

The President noted that though the details were not discussed the essence of the issue had not changed.

“Our position has undergone no changes. It implies that security of Nagorno Karabakh in all its manifestations cannot be speculated”, Bako Sahakian said. At that he emphasized the Karabakhi side’s interest in frequent meetings with the OSCE Minsk Group co-chairs.

“Each meeting is significant and conveys a new impulse to the negotiations. We informed the MG co-chairmen of the necessity to call on Stepanakert in the framework of their regional visit”, the NKR President said.

Asked if he is satisfied with the meeting with the Co-chairs, Mr Sahakian said, “We will be satisfied when the problem is finally resolved, i.e. when independence of Nagorno Karabakh is recognized. Participation of NKR in the talks as a full-fledged part will be a turning point. Only then the issue will be brought to its logical end,” the NKR MFA press office reports.

«It is difficult but children grow up Armenians»
19-01-2008 16:13:50 - KarabakhOpen

Armond Takhmuzyan went to Karabakh from Iran in 1999. `I wanted to come to Karabakh earlier but I had problems with my passport. At last they permitted me, I arrived here and realized that there is plenty of hard work,' Armond told us.

He was late for our meeting because he had to stand in line for water from the source. In winter water freezes inside pipes in the house where Armond's family lives, in summer there is little water in the river, and again they have to carry water from the source.

Nevertheless, Armond, his wife Artemis and two children stay in Karabakh.

Armond met his future wife Artemis in 2000 who first visited Karabakh from Australia in 1993 together with Lady Cox.

`I am a jeweler. In 2001 we opened the shop of souvenirs Nreni in Stepanakert. We have decided to enlarge our business. I don't have much money, but our friends promised to help with investments. We bought land in front of the shop and decided to build a building and set up a travel information center. My family will live on the first floor, we will let the other rooms. Our partners will arrive here in summer, for the rest of the year we will let rooms. We will donate the income,' Armond says, showing the plan of the future hotel.

`We honor the law. Perhaps everyone knows that we did not come here to earn money. Frankly speaking, we were never checked or fined. Although I should note that administration is too rigid. Too much bureaucracy. It is apparently the Soviet heritage. As well as the fact that people are used to cheating the government. Bureaucracy is a nest for bribers. These things may disappear if the country becomes richer,' Armond says full of hope.

`Tax administration could have been different. For instance, as soon as the tax service discovers a mistake, it immediately fines. I don't think it is the right way. First it is necessary to warn about the mistake and fine in case it repeats,' Artemis says.

`In our country it was different. When I worked in Iran, at the end of each month the bank sent us an envelope with bills. We only paid the bills. In case of problems, there are special offices you can turn to. Karabakh is undergoing transition, but it is too slow. We don't want to be a burden for anyone. On the contrary, we are trying to relieve others' burden. Intelligent people come here. They must have an opportunity to live and work,' Armond says.

`It is difficult but children grow up Armenians,' Artemis adds.