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ARMENIA, HOW TO AVOID ARMAGEDDON AND EVEN PROSPER?
Lragir.am
Society - 24 December 2014, 18:39
A few days ago the US Congress approved even tougher sanctions against
Russia, essentially declaring cold war against Russia. The US will
convince Europeans to follow up with tougher sanctions against Russia
too. Russia has already lost more than $200 Billion ($70 Billion in
currency devaluation and $140 Billion because of sanctions and lower
oil prices) due to the current sanctions and it is going to get worse.
While Russia is going down, they will definitely pull Armenia's economy
down, especially after the unpopular government of Armenia decided
to attach its entire Armenian economy to the sinking ship of Russia
with the EEU (Eurasian Economic Union). The outline of the upcoming
problems is eminent with the devaluation of the Armenian Dram, due to
Russian companies in Armenia trying to satisfy their thirst of dollars
by cleaning the Armenian economy of dollars. The problem is going to
deepen since at the same time the US is requesting Armenian banks to
provide information on the final destination of the monetary transfers
to Armenia from the US, making sure the money is not redirected to
Russia and will continue with making sure the Armenian export to the
US are not in any way generated in Russia. With the EEU, Armenia is
essentially becoming part of sanctions against Russia, without the
benefit that Russia had by gaining parts of Ukraine. It will become
tougher for Armenia to stabilize the Dram and with the current crisis
most probably deepening in Russia, we will see the Dram devaluating
at least 100% to around 800 to a dollar from 400 pre EEU levels in the
next 6 to 12 months due to the Dram closely following the devaluation
of the Ruble. It is apparent that 100% devaluation of the Ruble is
imminent, some experts are predicting new wave of devaluation of up
to 300% from current already 80% devaluation levels.
The crisis in Russia most probably will escalate into unrest. Economic
difficulties in Russia will at the same time motivate anger against
foreigners and most probably on the Armenian population in Russia.
Many seasonal Armenian workers will not be able to find jobs in
Russia and will be forced out of Russia, some hopefully will move
back to Armenia.
Families of the Armenian workers in Russia who desperately depend on
that income from Russia will find themselves in extreme financial
hardship in Armenia. The prices in Armenia will rise due to the
devaluation of the Dram and the slowing down economy. This will
generate a new wave of people leaving Armenia for the US and Europe.
What can Armenia do to stop the disaster and even benefit from the
crisis in Russia?
Taking into account that most exile from Armenia is not due to
economic problems of the population, but rather people are fed up
with unjust and uneven playing field; Armenia is in desperate need
of new, democratically elected government. The new government has
to establish an environment where Armenian people are equal in all
aspects of daily lives and economic endeavors. Major changes need to
be made to the Armenian laws to establish true equality of the people
by creating a fair playing field in criminal and business laws.
Even with detaching Armenia from the EEU, the devaluation of the
Dram is unstoppable; however the weaker Dram will be beneficial for
Armenia. The weaker Dram will give momentum to domestic production.
Outsourcing to Armenia for engineering and software development will
be more profitable, exports from Armenia will increase, and tourism
will prosper.
New Armenian government has to establish beneficial investment
opportunities in Armenia through changes to taxation laws and to the
tax exemption environment for new businesses. This will be the best
time for Armenians from other countries to establish businesses in
Armenia, by benefiting from the weaker Dram that will make Armenian
products more competitive in the marketplace, beneficial tax laws
and plain playing field. Armenians living in foreign countries have
a big role to play in helping Armenia, by investing in information
technology businesses in Armenia. This will also create jobs for
repatriating Armenians from Russia.
Armenia has an extremely beneficial environment for development of
IT and specifically for the software development industry. The work
force of Armenia is well educated, knowledgeable, loyal and well
versed in different IT technologies. The wonderful educational system
is producing qualified candidates for the software development
environment. Professional training facilities are available
for specific proficiency development. The Armenian work force is
multilingual in English, Russian, Farsi, Arabic, Spanish, German and
other European languages, speaking individuals are freely available
in Armenia.
Armenia has an advanced communications environment and has gone a
long way in establishing an advanced Internet infrastructure; there
are more fiber optic connections per capita in Armenia than in the US
Wireless communications via 4G, has much better coverage and is much
more affordable than in the US. Armenia's Internet is interconnected
with redundant multiple links to the worldwide Internet, and this
makes it possible for exporting one of the best assets of Armenia,
namely the creativity in technology and software development.
Salaries for software developers are below worldwide salary levels.
Salaries in Armenia range from 80,000 Drams for beginner level
software developers and up to 800,000 Drams for most professional
level software developers and engineers (from $160 to $1500 taking
into account the current exchange rate).
Armenia can use this opportunity to create an economy that is strictly
based on the hi- tech industry and information technology and is
less dependent on Russia's economy and diversified among many other
countries. Information technology and the hi-tech industry is the
key to an economically strong and independent Armenia.
Aram Ter-Martirosyan
Geopolitical Club, Armenian Desk
http://www.lragir.am/index/eng/0/society/view/33354#sthash.z2uHPeSI.dpuf
Lragir.am
Society - 24 December 2014, 18:39
A few days ago the US Congress approved even tougher sanctions against
Russia, essentially declaring cold war against Russia. The US will
convince Europeans to follow up with tougher sanctions against Russia
too. Russia has already lost more than $200 Billion ($70 Billion in
currency devaluation and $140 Billion because of sanctions and lower
oil prices) due to the current sanctions and it is going to get worse.
While Russia is going down, they will definitely pull Armenia's economy
down, especially after the unpopular government of Armenia decided
to attach its entire Armenian economy to the sinking ship of Russia
with the EEU (Eurasian Economic Union). The outline of the upcoming
problems is eminent with the devaluation of the Armenian Dram, due to
Russian companies in Armenia trying to satisfy their thirst of dollars
by cleaning the Armenian economy of dollars. The problem is going to
deepen since at the same time the US is requesting Armenian banks to
provide information on the final destination of the monetary transfers
to Armenia from the US, making sure the money is not redirected to
Russia and will continue with making sure the Armenian export to the
US are not in any way generated in Russia. With the EEU, Armenia is
essentially becoming part of sanctions against Russia, without the
benefit that Russia had by gaining parts of Ukraine. It will become
tougher for Armenia to stabilize the Dram and with the current crisis
most probably deepening in Russia, we will see the Dram devaluating
at least 100% to around 800 to a dollar from 400 pre EEU levels in the
next 6 to 12 months due to the Dram closely following the devaluation
of the Ruble. It is apparent that 100% devaluation of the Ruble is
imminent, some experts are predicting new wave of devaluation of up
to 300% from current already 80% devaluation levels.
The crisis in Russia most probably will escalate into unrest. Economic
difficulties in Russia will at the same time motivate anger against
foreigners and most probably on the Armenian population in Russia.
Many seasonal Armenian workers will not be able to find jobs in
Russia and will be forced out of Russia, some hopefully will move
back to Armenia.
Families of the Armenian workers in Russia who desperately depend on
that income from Russia will find themselves in extreme financial
hardship in Armenia. The prices in Armenia will rise due to the
devaluation of the Dram and the slowing down economy. This will
generate a new wave of people leaving Armenia for the US and Europe.
What can Armenia do to stop the disaster and even benefit from the
crisis in Russia?
Taking into account that most exile from Armenia is not due to
economic problems of the population, but rather people are fed up
with unjust and uneven playing field; Armenia is in desperate need
of new, democratically elected government. The new government has
to establish an environment where Armenian people are equal in all
aspects of daily lives and economic endeavors. Major changes need to
be made to the Armenian laws to establish true equality of the people
by creating a fair playing field in criminal and business laws.
Even with detaching Armenia from the EEU, the devaluation of the
Dram is unstoppable; however the weaker Dram will be beneficial for
Armenia. The weaker Dram will give momentum to domestic production.
Outsourcing to Armenia for engineering and software development will
be more profitable, exports from Armenia will increase, and tourism
will prosper.
New Armenian government has to establish beneficial investment
opportunities in Armenia through changes to taxation laws and to the
tax exemption environment for new businesses. This will be the best
time for Armenians from other countries to establish businesses in
Armenia, by benefiting from the weaker Dram that will make Armenian
products more competitive in the marketplace, beneficial tax laws
and plain playing field. Armenians living in foreign countries have
a big role to play in helping Armenia, by investing in information
technology businesses in Armenia. This will also create jobs for
repatriating Armenians from Russia.
Armenia has an extremely beneficial environment for development of
IT and specifically for the software development industry. The work
force of Armenia is well educated, knowledgeable, loyal and well
versed in different IT technologies. The wonderful educational system
is producing qualified candidates for the software development
environment. Professional training facilities are available
for specific proficiency development. The Armenian work force is
multilingual in English, Russian, Farsi, Arabic, Spanish, German and
other European languages, speaking individuals are freely available
in Armenia.
Armenia has an advanced communications environment and has gone a
long way in establishing an advanced Internet infrastructure; there
are more fiber optic connections per capita in Armenia than in the US
Wireless communications via 4G, has much better coverage and is much
more affordable than in the US. Armenia's Internet is interconnected
with redundant multiple links to the worldwide Internet, and this
makes it possible for exporting one of the best assets of Armenia,
namely the creativity in technology and software development.
Salaries for software developers are below worldwide salary levels.
Salaries in Armenia range from 80,000 Drams for beginner level
software developers and up to 800,000 Drams for most professional
level software developers and engineers (from $160 to $1500 taking
into account the current exchange rate).
Armenia can use this opportunity to create an economy that is strictly
based on the hi- tech industry and information technology and is
less dependent on Russia's economy and diversified among many other
countries. Information technology and the hi-tech industry is the
key to an economically strong and independent Armenia.
Aram Ter-Martirosyan
Geopolitical Club, Armenian Desk
http://www.lragir.am/index/eng/0/society/view/33354#sthash.z2uHPeSI.dpuf