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OVERTURE OR SCHEME?: WEST AND RUSSIA USE LENDING AS MEANS TO WIELD INFLUENCE OVER ARMENIA
By Naira Hayrumyan
ArmeniaNow
11.07.12 | 12:21
Photo: Via Facebook
Unofficial negotiations have started with the government of Russia
regarding the allocation to Armenia of a large loan in the near future,
writes the Haykakan Zhamanak daily.
According to the opposition newspaper, the matter is most likely
to concern a sum of $800 million to $1 billion. The paper says the
Armenian authorities began negotiations with the Russian side soon
after they got a refusal from the European Union regarding the
allocation of $1.5 billion to Armenia.
The Armenian government has not yet commented on this information,
but the ex-foreign minister of Armenia, member of the Prosperous
Armenia Party Vartan Oskanian has already voiced his concern over
the possible development in remarks on his Facebook page.
Oskanian believes that the government assurances that Armenia's foreign
debt is manageable and new loans won't be a burden is unrealistic:
"Today, Armenia's national debt makes 43 percent of the Gross Domestic
Product. For Armenia, it is a huge figure and a serious problem for
its economy."
The former minister reminded that Armenia's foreign debt amounts to
$4 billion in absolute terms. "If we add to it $1 billion from Russia,
the national debt will exceed 55 percent of GDP," said Oskanian.
"Every day, the Armenian national currency is losing value while the
external debt is serviced in foreign currency." Oskanian thinks that
the parliament should raise this issue at its session in September.
The issue of Armenia's external debt is not only a domestic issue, but
also is becoming a geopolitical factor. The struggle between the West
and Russia for influence in Armenia is becoming increasingly apparent,
just as the fact that the one who lends Armenia more will get more
"chances" of influencing Armenia. From this point of view it is not
excluded that Russia itself has offered to make a loan to Armenia.
Moreover, Moscow is conducting an offensive on other fronts as well.
In particular, Moscow intends to raise the price of natural gas
supplied to Armenia.
Some media reported that beginning on October 1, Russia's state-owned
natural gas monopoly Gazprom plans to increase the gas price for
Armenia from the current $180 to $280 per 1,000 cubic meters, and from
January 2013 - to up to $320. Besides, it is noted that this year
Russia has already increased the gas price for Armenia, but ahead
of the presidential election due in February 2013 the government
of Armenia prefers to keep it confidential and not raise the retail
prices for consumers.
If the information of media that the price of Russian natural
gas supplied to Armenia has already been increased by $60 and
the government holds back the existing tariffs on the domestic
market before next year's presidential election at the expense of
transferring 10 percent of its shares in [Armenian-Russian joint
venture] ArmRosgazprom, then big problems are looming, writes Oskanian.
"Armenia has a 20-percent stake in ArmRosGazprom. Thus, the government
distorts the pricing mechanism in the domestic market. That is,
because of this secrecy the price of natural gas is subsidized
in equal measure to both the poor and better-off sections of the
population. The government must immediately announce this transaction
and subsidize natural gas only for the socially vulnerable segments
of the population," said Oskanian.
There are also other areas in which Russia apparently has decided to
exert pressure on Armenia. One of them is air transport. There are
speculations about a probable sale of Armenia's national air carrier,
Armavia, to businessman and former member of the Armenian Parliament
Harutyun Pambukyan, who is currently doing business in Russia.
According to media reports, he intends to buy Armavia for its
subsequent sale to Russian businessmen.
Meanwhile, during the recent air show in Farnborough Armavia decided
to buy one Airbus and one Boeing aircraft. Earlier it became known
that the Armenian airline had refused to purchase Russian-made Sukhoi
Superjet 100 aircraft.
By Naira Hayrumyan
ArmeniaNow
11.07.12 | 12:21
Photo: Via Facebook
Unofficial negotiations have started with the government of Russia
regarding the allocation to Armenia of a large loan in the near future,
writes the Haykakan Zhamanak daily.
According to the opposition newspaper, the matter is most likely
to concern a sum of $800 million to $1 billion. The paper says the
Armenian authorities began negotiations with the Russian side soon
after they got a refusal from the European Union regarding the
allocation of $1.5 billion to Armenia.
The Armenian government has not yet commented on this information,
but the ex-foreign minister of Armenia, member of the Prosperous
Armenia Party Vartan Oskanian has already voiced his concern over
the possible development in remarks on his Facebook page.
Oskanian believes that the government assurances that Armenia's foreign
debt is manageable and new loans won't be a burden is unrealistic:
"Today, Armenia's national debt makes 43 percent of the Gross Domestic
Product. For Armenia, it is a huge figure and a serious problem for
its economy."
The former minister reminded that Armenia's foreign debt amounts to
$4 billion in absolute terms. "If we add to it $1 billion from Russia,
the national debt will exceed 55 percent of GDP," said Oskanian.
"Every day, the Armenian national currency is losing value while the
external debt is serviced in foreign currency." Oskanian thinks that
the parliament should raise this issue at its session in September.
The issue of Armenia's external debt is not only a domestic issue, but
also is becoming a geopolitical factor. The struggle between the West
and Russia for influence in Armenia is becoming increasingly apparent,
just as the fact that the one who lends Armenia more will get more
"chances" of influencing Armenia. From this point of view it is not
excluded that Russia itself has offered to make a loan to Armenia.
Moreover, Moscow is conducting an offensive on other fronts as well.
In particular, Moscow intends to raise the price of natural gas
supplied to Armenia.
Some media reported that beginning on October 1, Russia's state-owned
natural gas monopoly Gazprom plans to increase the gas price for
Armenia from the current $180 to $280 per 1,000 cubic meters, and from
January 2013 - to up to $320. Besides, it is noted that this year
Russia has already increased the gas price for Armenia, but ahead
of the presidential election due in February 2013 the government
of Armenia prefers to keep it confidential and not raise the retail
prices for consumers.
If the information of media that the price of Russian natural
gas supplied to Armenia has already been increased by $60 and
the government holds back the existing tariffs on the domestic
market before next year's presidential election at the expense of
transferring 10 percent of its shares in [Armenian-Russian joint
venture] ArmRosgazprom, then big problems are looming, writes Oskanian.
"Armenia has a 20-percent stake in ArmRosGazprom. Thus, the government
distorts the pricing mechanism in the domestic market. That is,
because of this secrecy the price of natural gas is subsidized
in equal measure to both the poor and better-off sections of the
population. The government must immediately announce this transaction
and subsidize natural gas only for the socially vulnerable segments
of the population," said Oskanian.
There are also other areas in which Russia apparently has decided to
exert pressure on Armenia. One of them is air transport. There are
speculations about a probable sale of Armenia's national air carrier,
Armavia, to businessman and former member of the Armenian Parliament
Harutyun Pambukyan, who is currently doing business in Russia.
According to media reports, he intends to buy Armavia for its
subsequent sale to Russian businessmen.
Meanwhile, during the recent air show in Farnborough Armavia decided
to buy one Airbus and one Boeing aircraft. Earlier it became known
that the Armenian airline had refused to purchase Russian-made Sukhoi
Superjet 100 aircraft.