By Susanna Petrosyan, Yerevan. Exclusively for Vestnik Kavkaza
Last week, the U.S. embassy in Armenia published a declaration, warning the Armenian government and business structures about the risks that may arise for cooperating with Russian companies and individuals blacklisted by the U.S. over the Ukraine crisis. Banks VTB, VTB Armenia and Gazprombank affected by the sanctions have officers in Armenia. The same concerns Gazprom’s Areximbank operating in Armenia. Armenia put hopes on Rosneft, which had plans to purchase the Nairit rubber factory.
The statement of the U.S. embassy stirred up local political and expert groups. Russia is the sole supplier of gas and the main investor in the Armenian economy. 40.2% of foreign investments came from Russia. The volume of Russian investments totaled $3.3 billion at the end of 2013. Many Armenian migrants live and work in Russia, they transfer $1.5-2 billion to their homeland every year.
The Russian economy marked zero growth in January-June and this may affect Russian companies in Armenia, they produce 17% of the local GDP. According to Vaagn Khachatryan, an economist, a member of the opposition Armenian National Congress Party, the sanctions of the West would not necessarily have a negative impact on Russian companies that will be forced to cut some of their programs in Armenia or postpone their realization. “The effect will be direct, because Russia has very high capital in Armenia. Armenian-Russian trade-economic cooperation may have great scale, and the Russian economy of the next year or two will hardly have positive development. This is not my analysis, it is that of Russian functionaries. If a 2% growth rate is achieved in 2016, it would be great success,” supposes Khachatryan, confident that sanctions will have an impact on the volume of Russian investment in the Armenian economy.
The third sector that may potentially become a target for Armenia is the volume of transfers from Russia, as can be seen from statistics of the last several months. Moreover, sanctions may have a negative impact on Armenian business in Russia, including exports of cognac, agricultural products etc.
Calls to drag out the process to join the Eurasian Economic Union (EaEU) or quit the process have already started in Armenia. Ex-Prime Minister Grant Bagratyan believes that “joining the EaEU would be utter stupidity. By joining the EaEU, we would complicate the economic situation in Armenia.”
Ara Papyan, the head of the Modus Vivendi Center, ex-ambassador of Armenia to Canada, said that Armenia needed to fix unilateral trade-economic orientation toward Russia or it will have problems with the West.
Some politicians and experts should know that Armenia is trying to diversify foreign trade turnover by developing and improving trade and economic ties in different directions. According to the Russian Ministry for Economic Development, CIS countries had a share of 29.4% in Armenian foreign trade in 2012, 23.5% of which were accumulated by Russia. 29.6% of Armenian trade turnover was accumulated with the EU, 41% with the U.S., China, Iran, Turkey and other countries.
In general, Armenia has a clear understanding of working with markets, including the huge and self-sufficient Russian market. Besides, modern Russia is searching for solutions to the situation. It has recently had meetings in Latin America to form a fund of $100 billion that will be focused on investments.
Washington warned Yerevan about possible risks of cooperation with RussiaBy Susanna Petrosyan, Yerevan. Exclusively for Vestnik KavkazaLast week, the U.S. embassy in Armenia published a declaration, warning the Armenian government and business structures about the risks that may arise for cooperating with Russian companies and individuals blacklisted by the U.S. over the Ukraine crisis. Banks VTB, VTB Armenia and Gazprombank affected by the sanctions have officers in Armenia. The same concerns Gazprom’s Areximbank operating in Armenia. Armenia put hopes on Rosneft, which had plans to purchase the Nairit rubber factory.The statement of the U.S. embassy stirred up local political and expert groups. Russia is the sole supplier of gas and the main investor in the Armenian economy. 40.2% of foreign investments came from Russia. The volume of Russian investments totaled $3.3 billion at the end of 2013. Many Armenian migrants live and work in Russia, they transfer $1.5-2 billion to their homeland every year.The Russian economy marked zero growth in January-June and this may affect Russian companies in Armenia, they produce 17% of the local GDP. According to Vaagn Khachatryan, an economist, a member of the opposition Armenian National Congress Party, the sanctions of the West would not necessarily have a negative impact on Russian companies that will be forced to cut some of their programs in Armenia or postpone their realization. “The effect will be direct, because Russia has very high capital in Armenia. Armenian-Russian trade-economic cooperation may have great scale, and the Russian economy of the next year or two will hardly have positive development. This is not my analysis, it is that of Russian functionaries. If a 2% growth rate is achieved in 2016, it would be great success,” supposes Khachatryan, confident that sanctions will have an impact on the volume of Russian investment in the Armenian economy.The third sector that may potentially become a target for Armenia is the volume of transfers from Russia, as can be seen from statistics of the last several months. Moreover, sanctions may have a negative impact on Armenian business in Russia, including exports of cognac, agricultural products etc.Calls to drag out the process to join the Eurasian Economic Union (EaEU) or quit the process have already started in Armenia. Ex-Prime Minister Grant Bagratyan believes that “joining the EaEU would be utter stupidity. By joining the EaEU, we would complicate the economic situation in Armenia.”Ara Papyan, the head of the Modus Vivendi Center, ex-ambassador of Armenia to Canada, said that Armenia needed to fix unilateral trade-economic orientation toward Russia or it will have problems with the West.Some politicians and experts should know that Armenia is trying to diversify foreign trade turnover by developing and improving trade and economic ties in different directions. According to the Russian Ministry for Economic Development, CIS countries had a share of 29.4% in Armenian foreign trade in 2012, 23.5% of which were accumulated by Russia. 29.6% of Armenian trade turnover was accumulated with the EU, 41% with the U.S., China, Iran, Turkey and other countries.In general, Armenia has a clear understanding of working with markets, including the huge and self-sufficient Russian market. Besides, modern Russia is searching for solutions to the situation. It has recently had meetings in Latin America to form a fund of $100 billion that will be focused on investmen
