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Russo-Ukrainian Standoff: Experts See Consequences For Armenian Econ

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  • Russo-Ukrainian Standoff: Experts See Consequences For Armenian Econ

    RUSSO-UKRAINIAN STANDOFF: EXPERTS SEE CONSEQUENCES FOR ARMENIAN ECONOMY

    http://armenianow.com/economy/52450/armenia_ukraine_events_russia
    ECONOMY | 05.03.14 | 12:52

    By Gohar Abrahamyan
    ArmeniaNow reporter

    The escalation of tensions between Russia and Ukraine, according to
    experts, will also affect the Armenian economy as remittances wired
    by migrant workers abroad are likely to reduce.

    After the ouster of President Viktor Yanukovych and the formation of
    a pro-Western government in Kyiv late last month Russia effectively
    moved to establish its military control over Crimea, an autonomous
    republic in the south of Ukraine with a predominantly ethnic Russian
    population that hosts Moscow's strategic naval base on the Black Sea.

    The Russian parliament also empowered President Vladimir Putin to
    use military force as appropriate to defend the ethnic Russian and
    Russian-speaking population elsewhere in the territory of Ukraine.

    About 100,000 Armenians live in Ukraine, according to official
    figures, but unofficial accounts put their number at between 400,000
    and 600,000.

    According to the Armenian National Statistical Service, in 2012,
    among former Soviet countries the top trade partner of Armenia was
    Russia, followed by Ukraine. According to the data of the Central Bank
    Bulletin, in 2013 alone, Armenia received $1 billion, 607 million via
    the banking system through individuals, with the bulk of the transfers
    made from Russia. Some of the transfers were also made from Ukraine.

    Member of the opposition Armenian National Congress party, economist
    Vahagn Khachatryan says that Ukraine is an important partner for
    Armenia and any event taking place there will also have its impact
    on Armenia. The economist says that at this moment the situation
    is still uncertain, there is no publication about how the events of
    recent days will impact the Ukrainian economy.

    The economic situation appears to be worsening in Russia, too.

    Armenian oppositionist David Shahnazaryan says in the last couple of
    days the country lost more on its stock exchanges than it spent during
    the recent Olympics in Sochi that cost the Russian budget $52 billion.

    During a meeting with journalists on Tuesday Shahnazaryan said that
    the main reason for that is that "the accounts of Russia's political
    elite have already been frozen in Western banks."

    A devaluation of securities by some 13 percent has been observed
    on Russia's stock market, which also led to the depreciation of the
    Russian ruble. The Russian currency also lost its grounds in Armenia.

    Since February 24, it depreciated by about 4 percent against the dram.

    Economist Vahagn Khachatryan believes that the devaluation of the
    ruble will also have a negative impact on Armenia.

    "There was a similar thing happening during the 2009 crisis,
    when Russia was in trouble and the amount of transfers from there
    dramatically decreased, and Armenia's construction sector then also
    shrank significantly. And now there are two compelling circumstances -
    one is the tightening of immigration laws in Russia, and the other is
    the policy of the Russian Central Bank regarding the national currency
    exchange rate, which will result in the reduction of remittances from
    Russia," says the economist.


    From: Baghdasarian
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