JULY 8 2014 (The Conway Bulletin) – Armenia’s government confirmed that it had lowered its economic growth predictions to 4% from 5.2% because of sanctions imposed on Russia, its most important trading partner, since it annexed Crimea from Ukraine earlier this year. Most countries in the former Soviet Union have downgraded growth estimates because of sanctions.
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(News report from Issue No. 192, published on July 9 2014)
JULY 2 2014 (The Conway Bulletin) – Concerned about possible unrest connected with electricity price increases, Armenian president Serzh Sargsyan has ordered his policy chiefs to investigate whether it can soften the price rises for less well-off families, media reported.
Last month Armenia announced that it would increase the price for electricity by 10% form Aug. 1, its first price increase in two years.
Opposition politicians have said that the price increase will trigger inflation across the country and that this is just the first of several price planned price rises.
Armenia’s government has already had to negotiate through a difficult year.
A government resigned because of public unhappiness over its pension reform plans, economic growth estimates have been downgraded because of sanctions on Russia and now an electricity price increase threatens to erode the government’s popularity further.
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(News report from Issue No. 192, published on July 9 2014)
JULY 8 2014 (The Conway Bulletin) – More bad news for Armenia’s economy. Quoting the state’s statistics agency, media reported that jewellery production in Armenia had fallen by a third this year between January and May. It did not say why production had fallen although sanctions on Russia have impacted Armenia’s economy.
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(News report from Issue No. 192, published on July 9 2014)
JULY 7 2014 (The Conway Bulletin) – Azerbaijan appears to be ramping up the pressure on Armenia over the disputed region of Nagorno-Karabakh by holding a series of high profile military exercises along the border.
Armenian backed rebels have held Nagorno-Karabakh since a 1994 UN negotiated cease-fire but barely a week goes by without reports of isolated shootouts and casualties. Over the past decade, as Azerbaijan have become increasingly rich from oil and gas, it has also built up its weapons systems and military.
And increasingly bellicose language about war with Armenia has built up.
“Servicemen shouldn’t forget that 20 percent of the Azerbaijan’s territories are under occupation and the main task is to free these lands from invasion,” Azerbaijani Defense Minister Colonel-General Zakir Hasanov said at a ceremony to honour the militar earlier this month.
This 20% is Nagorno-Karbakh and adjacent regions.
Europe’s peace monitoring watchdog, the Organisation for Cooperation and Secutriy in Europe (OSCE) has consistently called the dispute over Nagorno-Karabakh the most dangerous of the South Caucasus’ frozen conflicts.
Azerbaijani media reported that 10,000 soldiers, 300 armoured vehicles, 100 artillery pieces, 20 aircraft and 15 air defence pieces were taking part in the 3-day exercise.
This exercise is certainly large but it needs to understood in context. Earlier this year, Azerbaijan mobilised 20,000 soldiers for an exercise on the border.
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(News report from Issue No. 192, published on July 9 2014)
JUNE 26 2014 (The Conway Bulletin) – Armenia confirmed the appointment of Tigran Sarkisyan, PM for six years until April, as its ambassador in the US. Mr Sarkisyan resigned in April because reforms to the pension system that his government had suggested were deeply unpopular.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 30 2014 (The Conway Bulletin) – The impact of sanctions on Russia is hitting all the economies of the South Caucasus and Central Asia but none more so than Armenia.
Armenia is particularly reliant on Russia for both financial support and as a market for its export. Last month, the Armenian Central Bank said it would cut interest rates for the third time this year to a four year low to try and curb falling inflation.
The latest inflation numbers show just how much work the Central Bank needs to do to prop up the economy. Armenia’s statistics agency said that inflation for the first half of the year was 4%, at the bottom end of its range.
But even this figure hides the really worrying data. Average prices in June fell 1.8% against May.
For more evidence of Russia’s faltering economy hitting the more outlying regions of the former Soviet Union, cognac is as good a place to look as any other. Armenian cognac is famous around the former Soviet Union and Russia is its biggest export market.
The latest data showed that cognac production fell for the first five months of May by 11.1% to just over 5.5m litres compared to the same period in 2013.
Although no official explanation has been given, the message is still fairly clear.
“In the first quarter of 2014 Armenia exported to Russia half the amount of cognac compared with the the same reporting period in 2013,” an Armenian business website reported. “They [Russian cognac importers] are in an unstable financial situation and do not know what will the political conflict between Russia and Ukraine.”
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(News report from Issue No. 190, published on July 2 2014)
JULY 1 2014 (The Conway Bulletin) – Armenia accused Azerbaijan of intensifying shelling of pro- Armenian forces in the disputed region of Nagorno-Karabakh. Tension has been rising around Nagorno-Karabakh. Armenia’s defence minister, Seyran Ohanyan, also rejected calls for the Russia-led Collective Security Treaty Organisation (CSTO) to monitor the cease-fire around Nagorno-Karabakh.
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(News report from Issue No. 190, published on July 2 2014)
JULY 1 2014 (The Conway Bulletin) – Russia ratified a deal that gives Armenia tax-free imports of gas, oil and diamonds until it joins the Eurasian Economic Union. Russia has become a major patron of Armenia. This year it completed the purchase of Armenia’s gas supply network. Armenia hopes to join the Eurasian Economic Union this year.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 19 2014 (The Conway Bulletin) – The head of Russian arms manufacturer Rosoboronexport, Anatoliy Isaykin, flew to Baku to meet with Azerbaijani officials, media reported. Russia has increased sales of arms to Azerbaijan over the last couple of years despite being an ardent supporter of its arch foe Armenia.
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(News report from Issue No. 190, published on June 25 2014)
JUNE 23 2014 (The Conway Bulletin) – Russia’s foreign minister, Sergei Lavrov, visited Yerevan in a show of support for the Armenian government. Russia is Armenia’s main ally and the Armenian government wants to join the Kremlin-lead Eurasian Economic Union later this year. Pointedly, Mr Lavrov didn’t mention the Eurasian Economic Union during his trip.
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(News report from Issue No. 190, published on June 25 2014)