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U.S. SANCTIONS AGAINST RUSSIA MAY HIT ARMENIA
Vestnik Kavkaza, Russia
Aug 8 2014
8 August 2014 - 10:53am
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.
http://vestnikkavkaza.net/analysis/economy/58576.html
From: Baghdasarian
Vestnik Kavkaza, Russia
Aug 8 2014
8 August 2014 - 10:53am
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.
http://vestnikkavkaza.net/analysis/economy/58576.html
From: Baghdasarian