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Sanctions: Armenia may feel fallout from West's punishment of Russia
ECONOMY | 04.09.14 | 15:59
NAZIK ARMENAKYAN
ArmeniaNow
By SARA KHOJOYAN
ArmeniaNow reporter
Experts claim that sanctions by the West against Russia because of the
Ukrainian crisis have put Russia-dependent Armenia in a difficult
economic state.
Although Armenian neighbor Iran's resistance against the West did not
have any major negative results on Armenia, this does not serve as a
ground to think that Armenia will be able to withstand the problems
awaiting the Russian economy.
Armenia is attached to Russia by several economic routes. The majority
of Armenian labor migrants work in Russia. In 2013 money transfer from
Russia to Armenia made $1.6 billion.
Russia is one of the biggest investors in Armenia, a number of leading
Russian companies working in Armenia, such as Gazprom, InterRao EES,
Rosneft, Areximbank-Gazprombank, VTB-Armenia bank and others are
sanctioned.
Russia is also the main Armenian trade partner; importing
three-fourths of its good from Russia and exporting one-fourth.
President Serzh Sargsyan reflected on the influence these sanctions
had on Armenia, answering questions regarding the negative
consequences of these sanctions on the Armenian economy.
"Those who side with this viewpoint base it on the fact that if the
Russian economy has little or no growth, and because our economy is
tightly connected with the Russian, there will surely be negative
consequences for Armenia. I cannot reject that hypothesis," Sargsyan
told Armnews channel emphasizing that "it is simply a hypothesis".
According to political analyst Yervand Bozoyan's evaluation, the
serious geopolitical crisis stemming from the Ukrainian civil war has
put Armenia in a complicated situation.
"Armenia depends on Russia, but it has some dependence on the West as
well. Armenia must try to use policy which will not raise anger on
either side," the political analyst told ArmeniaNow.
"If the Ukrainian crisis continues, at least the amount of transfers
will decease. If we consider that the annual amount of transfers forms
almost an equal sum as the Armenian state budget, then it is a serious
threat to the consumer market, which is decreasing even without it,"
Bozoyan added.
It is noteworthy that right after the West started sanctions the USA
warned all countries, including Armenia, which are in good relations
with Russia, "that dealing with sanctioned people or companies will
put their reputation at risk."
The US Embassy to Armenia gave an interview to Freedom radio station
where it advised to cease all transactions which contradict the
sanctions applied against Russia. The problem is that many companies
in Armenia, such as Gazprom, InterRao EES have a monopolistic role and
blocking their activities is impossible.
http://armenianow.com/economy/56596/ukraine_sanctions_armenian_budget
ECONOMY | 04.09.14 | 15:59
NAZIK ARMENAKYAN
ArmeniaNow
By SARA KHOJOYAN
ArmeniaNow reporter
Experts claim that sanctions by the West against Russia because of the
Ukrainian crisis have put Russia-dependent Armenia in a difficult
economic state.
Although Armenian neighbor Iran's resistance against the West did not
have any major negative results on Armenia, this does not serve as a
ground to think that Armenia will be able to withstand the problems
awaiting the Russian economy.
Armenia is attached to Russia by several economic routes. The majority
of Armenian labor migrants work in Russia. In 2013 money transfer from
Russia to Armenia made $1.6 billion.
Russia is one of the biggest investors in Armenia, a number of leading
Russian companies working in Armenia, such as Gazprom, InterRao EES,
Rosneft, Areximbank-Gazprombank, VTB-Armenia bank and others are
sanctioned.
Russia is also the main Armenian trade partner; importing
three-fourths of its good from Russia and exporting one-fourth.
President Serzh Sargsyan reflected on the influence these sanctions
had on Armenia, answering questions regarding the negative
consequences of these sanctions on the Armenian economy.
"Those who side with this viewpoint base it on the fact that if the
Russian economy has little or no growth, and because our economy is
tightly connected with the Russian, there will surely be negative
consequences for Armenia. I cannot reject that hypothesis," Sargsyan
told Armnews channel emphasizing that "it is simply a hypothesis".
According to political analyst Yervand Bozoyan's evaluation, the
serious geopolitical crisis stemming from the Ukrainian civil war has
put Armenia in a complicated situation.
"Armenia depends on Russia, but it has some dependence on the West as
well. Armenia must try to use policy which will not raise anger on
either side," the political analyst told ArmeniaNow.
"If the Ukrainian crisis continues, at least the amount of transfers
will decease. If we consider that the annual amount of transfers forms
almost an equal sum as the Armenian state budget, then it is a serious
threat to the consumer market, which is decreasing even without it,"
Bozoyan added.
It is noteworthy that right after the West started sanctions the USA
warned all countries, including Armenia, which are in good relations
with Russia, "that dealing with sanctioned people or companies will
put their reputation at risk."
The US Embassy to Armenia gave an interview to Freedom radio station
where it advised to cease all transactions which contradict the
sanctions applied against Russia. The problem is that many companies
in Armenia, such as Gazprom, InterRao EES have a monopolistic role and
blocking their activities is impossible.
http://armenianow.com/economy/56596/ukraine_sanctions_armenian_budget