MARCH 10 2014 (The Conway Bulletin) — The IMF has approved a 38 month loan roughly equal to about $127m to support economic development in Armenia, media reported. Announcing the deal, media quoted Nemat Shafik, deputy managing director of the IMF, as saying that inflation and a large current account deficit were still a worry for Armenia.
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(News report from Issue No. 175, published on March 12 2014)
MARCH 10 2014 (The Conway Bulletin) — Predictions on how Armenia will perform economically over the next year don’t make pretty reading.
First, deputy economy minister Vahram Avanesyan was blunt about the impact of a downturn in the Russian economy on Armenia.
In particular he said that the drop by 10% of Russia’s rouble currency would affect the value of remittances to Armenia and also exports from Armenia.
“The first potential security risk is decline in real value of private transfers, the second is lower revenues of Armenian exporters to Russia,” media quoted Mr Avanesyan as saying.
The economies of Central Asia and the South Caucasus are closely linked to the fortunes of Russia. Remittance flows are particularly strong from Russia out to these peripheries of the former Soviet Union.
Armenia, though, is probably more vulnerable than most. Russian companies are bank rolling most of the country’s commerce and Russia’s state-owned companies are large investors.
Shortly after Mr Avanesyan’s assessment the IMF released its forecasts for the Armenian economy.
It said that growth would hit 4.3% in 2014 but that inflation would rise to 5%.
In line with other currencies in the region, Armenia’s dram also weakened earlier this month with the rouble. On March 3, it dropped from 350 drams to the dollar to 400 drams.
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(News report from Issue No. 175, published on March 12 2014)
FEB. 28 2014 (The Conway Bulletin) — Russia’s parliament has pass a bill to tighten military ties with Armenia, local media reported. The bill is likely to mean an increase of military kit for Armenia from Russia. It is important for Armenia as it underlines Russia as one of its main backers.
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(News report from Issue No. 174, published on March 5 2014)
MARCH 1 2014 (The Conway Bulletin) — Armenia will join the Russia-led Customs Union by mid-April, local media quoted deputy foreign minister Shavarsh Kocharyan as saying.
His statement was a show of support from the Armenian government to Russia in its row with the West over Ukraine. Armenia has previously said it would not be ready to join the Customs Union — a loose economic bloc including Russia, Belarus and Kazakhstan — until June.
The decision last year by Ukraine’s government to turn its back on the European Union in favour of closer ties with Russia, triggered demonstrations which culminated in his month’s revolution.
Armenia, though, has never wavered in its support for Russia. Its move towards the Customs Union and away from the European Union has broad public support.
Russian companies are one of the biggest investors in Armenia. Earlier this year Russian gas monopoly Gazprom completed the purchase of the Armenia gas network and oil company Rosneft has also pledged to invest $500m into a rubber plant outside Yerevan.
The Russian military also maintains one of its biggest overseas bases in Armenia which the public sees as a bulwark against potential Azerbaijani aggression. Also on March 1, one of the main opposition leaders in Armenia, former president Levon Ter-Petrosyan told his supporters at a rally in Yerevan that joining the Customs Union was the right move for Armenia.
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(News report from Issue No. 174, published on March 5 2014)
MARCH 3 2014 (The Conway Bulletin) — Armenia’s external debt grew by 4.4% in 2013 to $3.9b, media quoted the national statistics service as saying. Nearly half of this debt is owed to the World Bank, underling just how dependent Armenia is on international finance organisations.
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(News report from Issue No. 174, published on March 5 2014)
FEB. 27 2014 (The Conway Bulletin) — Georgia’s President Giorgi Margvelashvili visited his Armenian counterpart Serzh Sargsyan to reaffirm strong relations between the two countries despite their divergent foreign policy. Georgia is close to the West while Armenia is increasingly close to Russia.
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(News report from Issue No. 174, published on March 5 2014)
MARCH 3 2014 (The Conway Bulletin) — A new law in Russia means 220,000 Armenian workers will shortly have to return home, cutting remittance flows, media quoted demographic analyst Ruben Yeganyan as saying. From Jan. 1, Russia will allow casual labourers to stay only 90 days in a 180-day period. Remittances from Russia are a vital income for many Armenian families.
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(News report from Issue No. 174, published on March 5 2014)
FEB. 24 2014 (The Conway Bulletin) — Azerbaijan chalked up a diplomatic success when the government of Honduras in Central America passed a motion earlier this year condemning Armenian aggression in Nagorno-Karabakh, Azerbaijani media reported. Azerbaijan fought a war over Nagorno-Karabakh with Armenia in the early 1990s. Watch out for fresh investment in Honduras by Azerbaijan.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 25 2014 (The Conway Bulletin) — In case there was ever any doubt over who is in charge, Armenia’s national gas distributor was renamed Gazprom Armenia from ArmRosGazprom, the company said in a statement. Gazprom, Russia’s gas monopoly, finalised buying the whole of Armenia’s gas network in January.
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(News report from Issue No. 173, published on Feb. 26 2014)
FEB. 11 2014 (The Conway Bulletin) — Russian energy company Rosneft and Italian tyre manufacturer Pirelli are considering building a rubber plant in Armenia, media reported. The plant would be a boost for Armenian industry and would also underscore the close relationship between Russia and Armenia. Armenia is joining the Russia-led Customs Union this year.
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(News report from Issue No. 171, published on Feb. 12 2014)