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Trend, Azerbaijan
Oct 22 2011
"Apricot Republic" Armenia expects second wave of crisis
22 October 2011, 09:00 (GMT+05:00) Trend European Desk Commentator
Elmira Tariverdiyeva
The fear experienced by the countries with weak economic systems is
not alien to a small 'apricot republic like Armenia, blocked on two
sides by insoluble arguments with its neighbours.
Yerevan too, has learned from bitter experience of the impact of the
financial crisis of 2008 and faces disappointing forecasts as the
approaching wave of a second global economic collapse signals more
destruction.
Prime Minister Tigran Sargsyan recently recognised that matters could
now come to a head in 2012. The Mediamax agency reported that the
prime minister discussed this at a meeting of the EurAsEC Interstate
Council in St. Petersburg.
Of course Armenia reflects back to 'Black Tuesday' in April 2009 and
Yerevan looks nervously at what the next financial disaster might do.
The cause of the 2009 collapse was the Armenian Central Bank declaring
a floating exchange rate of U.S. dollars which caused an unprecedented
rush.
The dollar cost 305-306 drams on Tuesday morning and was sold for 309.
These figures increased to 350 and 390 drams in the afternoon,
respectively. After the sharp fall of the Armenian currency, the
prices on pharmaceuticals increased. A number of pharmacies in Yerevan
closed and when they reopened, prices on medicines increased by 20 to
30 per cent.
After the collapse of the Armenia's national currency, the dram, the
state deteriorated whilst prices on fuel, sugar, oil and other
essential commodities increased.
The memory of the terrible 'Black Tuesday' is supported by the current
disappointing state of the Armenian economy. After the global crisis,
it had not changed enough to help the country to overcome the negative
impact of the second wave of recession.
Mr Sargsyan was quoted as saying: "The world financial crisis
significantly hit the construction industry in Armenia in 2009.
"The decline was registered at 43 per cent, but the main issue of
concern to us is a possible crisis expected in 2012. One should
understand how it might affect our economy. Our consultations with the
World Bank, International Monetary Fund and other international
organisations do not give a clear answer to the question how the rest
of the world will affect our economy."
Of course, Prime Minister is cunning. Yerevan does not want to believe
in the points designated to Armenia by the international financial
institutions.
In his recent interview with ARKA agency, member of delegation of EBRD
Board of Directors Kurt Bayer answered all questions regarding the sad
future of the Armenian economy.
Stressing that the Armenian economy got a painful blow during the
crisis, Bayer said that the economic recovery proceeds rather inertly.
"This testifies to the fact that the economy has structural
inefficiency," he said. "This made it very vulnerable given the
negative development of the world economy."
According to the EBRD representative, many potential foreign investors
say that Armenia is perceived as a country with high level of
corruption. The rule of law is not sufficient in the country and that
people whose economic rights are violated, can not to seek protection
in the court.
All this means that the second wave of crisis may affect the economy
of the apricot republic which has not recovered after the first wave
of crisis. It is fragile because of isolation from all transportation
projects in the region.
There are all conditions that Prime Minister Sargsyan's anxiety justified.
According to the Armenian National Statistical Service, consumer
prices increased by 10.6 percent in Armenia in 2010. The largest price
increase - 13.1 percent was registered for food, that is, the social
welfare sector, without which it is impossible to do. Prices on
industrial goods increased by 5.6 percent, tariffs for services - by
4.2 percent.
The poverty rate has already reached 35 percent. This made 60,000
people to leave Armenia last year. The level of habitation continues
reducing and threatens to turn into a revolution to overthrow the
power. Moreover, the current power in Armenia does nothing to try and
help people. As a result of the governmental policy and a lack of real
market competition, small and medium facilities are closed. This
significantly affects the public due to the increase in prices and the
monopolization of the economy.
In this situation, the second wave of crisis could be the last blow to
the Armenian economy.
From: A. Papazian
Oct 22 2011
"Apricot Republic" Armenia expects second wave of crisis
22 October 2011, 09:00 (GMT+05:00) Trend European Desk Commentator
Elmira Tariverdiyeva
The fear experienced by the countries with weak economic systems is
not alien to a small 'apricot republic like Armenia, blocked on two
sides by insoluble arguments with its neighbours.
Yerevan too, has learned from bitter experience of the impact of the
financial crisis of 2008 and faces disappointing forecasts as the
approaching wave of a second global economic collapse signals more
destruction.
Prime Minister Tigran Sargsyan recently recognised that matters could
now come to a head in 2012. The Mediamax agency reported that the
prime minister discussed this at a meeting of the EurAsEC Interstate
Council in St. Petersburg.
Of course Armenia reflects back to 'Black Tuesday' in April 2009 and
Yerevan looks nervously at what the next financial disaster might do.
The cause of the 2009 collapse was the Armenian Central Bank declaring
a floating exchange rate of U.S. dollars which caused an unprecedented
rush.
The dollar cost 305-306 drams on Tuesday morning and was sold for 309.
These figures increased to 350 and 390 drams in the afternoon,
respectively. After the sharp fall of the Armenian currency, the
prices on pharmaceuticals increased. A number of pharmacies in Yerevan
closed and when they reopened, prices on medicines increased by 20 to
30 per cent.
After the collapse of the Armenia's national currency, the dram, the
state deteriorated whilst prices on fuel, sugar, oil and other
essential commodities increased.
The memory of the terrible 'Black Tuesday' is supported by the current
disappointing state of the Armenian economy. After the global crisis,
it had not changed enough to help the country to overcome the negative
impact of the second wave of recession.
Mr Sargsyan was quoted as saying: "The world financial crisis
significantly hit the construction industry in Armenia in 2009.
"The decline was registered at 43 per cent, but the main issue of
concern to us is a possible crisis expected in 2012. One should
understand how it might affect our economy. Our consultations with the
World Bank, International Monetary Fund and other international
organisations do not give a clear answer to the question how the rest
of the world will affect our economy."
Of course, Prime Minister is cunning. Yerevan does not want to believe
in the points designated to Armenia by the international financial
institutions.
In his recent interview with ARKA agency, member of delegation of EBRD
Board of Directors Kurt Bayer answered all questions regarding the sad
future of the Armenian economy.
Stressing that the Armenian economy got a painful blow during the
crisis, Bayer said that the economic recovery proceeds rather inertly.
"This testifies to the fact that the economy has structural
inefficiency," he said. "This made it very vulnerable given the
negative development of the world economy."
According to the EBRD representative, many potential foreign investors
say that Armenia is perceived as a country with high level of
corruption. The rule of law is not sufficient in the country and that
people whose economic rights are violated, can not to seek protection
in the court.
All this means that the second wave of crisis may affect the economy
of the apricot republic which has not recovered after the first wave
of crisis. It is fragile because of isolation from all transportation
projects in the region.
There are all conditions that Prime Minister Sargsyan's anxiety justified.
According to the Armenian National Statistical Service, consumer
prices increased by 10.6 percent in Armenia in 2010. The largest price
increase - 13.1 percent was registered for food, that is, the social
welfare sector, without which it is impossible to do. Prices on
industrial goods increased by 5.6 percent, tariffs for services - by
4.2 percent.
The poverty rate has already reached 35 percent. This made 60,000
people to leave Armenia last year. The level of habitation continues
reducing and threatens to turn into a revolution to overthrow the
power. Moreover, the current power in Armenia does nothing to try and
help people. As a result of the governmental policy and a lack of real
market competition, small and medium facilities are closed. This
significantly affects the public due to the increase in prices and the
monopolization of the economy.
In this situation, the second wave of crisis could be the last blow to
the Armenian economy.
From: A. Papazian