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Armenia and Russia: Stuck with each other - The Economist
10:32 * 21.03.15
http://www.tert.am/en/news/2015/03/21/armenia-russia/1623910
How long might the so-called "frozen conflict" that is developing in
eastern Ukraine last? A look at Armenia may give some idea. Its
conflict with Azerbaijan over the disputed territory of
Nagorno-Karabakh first broke out in 1988, and is still going strong.
Armenia's borders with Azerbaijan and Turkey are closed to this day,
leaving it isolated and economically stagnant. On March 19th three
more Armenian soldiers were killed in a skirmish.
The increasing threat of escalation leads Armenia to depend upon
Russia for protection, but Armenians are growing increasingly
frustrated with the relationship. They are particularly unhappy with
Russian arms sales to Azerbaijan, which account for 85% of that
country's acquisitions over the past five years, according to a new
report. Armenia officially joined the Eurasian Economic Union (EEU), a
Moscow-led customs union, at the beginning of this year. But the
decision to join the EEU was taken under duress, as Russia threatened
to reconsider its alliance if Armenia signed an association agreement
with the European Union.
The EEU does the Armenian economy few favors, according to Richard
Giragosian, director of the Regional Studies Centre, a Yerevan-based
think tank. The absence of shared borders with the other three
members--Russia, Belarus and Kazakhstan--makes trade difficult.
Membership requires Armenia to introduce high tariffs, which undermine
competitiveness and deter foreign investors. That, combined with the
poor protection of intellectual-property rights, could threaten some
of the economy's bright spots, such as the IT sector, which
contributed 5% of GDP in 2013.
Russia's economic woes in the wake of falling oil prices and
international sanctions have caused further damage. Remittances from
abroad accounted for 21% of Armenia's GDP in 2013. They fell by 7.7%
in 2014, and are forecast to fall a further 30% this year. Russia has
sent thousands of Armenians home, allegedly for violating migration
rules, and more could be coming. Exports were down by 22% in January
compared with a year earlier, and the Central Bank expects meager
growth in 2015.
Popular frustration with Russia came to a head in January, after a
Russian soldier murdered six members of an Armenian family in the city
of Gyumri. The soldier was quickly spirited away to be tried in
Russia. Thousands of Armenians took to the streets, protesting both
Russian arrogance and their own government's subservience. A
heavy-handed police response only made matters worse.
Armenia cannot afford to turn its back on Russia, but the government
is trying to draft a new association agreement with the European Union
that would be consistent with its membership of the EEU. The EU is
still interested in better commercial ties, as is America. In January,
ContourGlobal, an American power company, made a significant
investment in Armenia's energy sector.
See more here>>>
http://www.economist.com/news/europe/21646947-russian-ally-rues-its-dependence-upon-moscow-stuck-each-other
From: Baghdasarian
10:32 * 21.03.15
http://www.tert.am/en/news/2015/03/21/armenia-russia/1623910
How long might the so-called "frozen conflict" that is developing in
eastern Ukraine last? A look at Armenia may give some idea. Its
conflict with Azerbaijan over the disputed territory of
Nagorno-Karabakh first broke out in 1988, and is still going strong.
Armenia's borders with Azerbaijan and Turkey are closed to this day,
leaving it isolated and economically stagnant. On March 19th three
more Armenian soldiers were killed in a skirmish.
The increasing threat of escalation leads Armenia to depend upon
Russia for protection, but Armenians are growing increasingly
frustrated with the relationship. They are particularly unhappy with
Russian arms sales to Azerbaijan, which account for 85% of that
country's acquisitions over the past five years, according to a new
report. Armenia officially joined the Eurasian Economic Union (EEU), a
Moscow-led customs union, at the beginning of this year. But the
decision to join the EEU was taken under duress, as Russia threatened
to reconsider its alliance if Armenia signed an association agreement
with the European Union.
The EEU does the Armenian economy few favors, according to Richard
Giragosian, director of the Regional Studies Centre, a Yerevan-based
think tank. The absence of shared borders with the other three
members--Russia, Belarus and Kazakhstan--makes trade difficult.
Membership requires Armenia to introduce high tariffs, which undermine
competitiveness and deter foreign investors. That, combined with the
poor protection of intellectual-property rights, could threaten some
of the economy's bright spots, such as the IT sector, which
contributed 5% of GDP in 2013.
Russia's economic woes in the wake of falling oil prices and
international sanctions have caused further damage. Remittances from
abroad accounted for 21% of Armenia's GDP in 2013. They fell by 7.7%
in 2014, and are forecast to fall a further 30% this year. Russia has
sent thousands of Armenians home, allegedly for violating migration
rules, and more could be coming. Exports were down by 22% in January
compared with a year earlier, and the Central Bank expects meager
growth in 2015.
Popular frustration with Russia came to a head in January, after a
Russian soldier murdered six members of an Armenian family in the city
of Gyumri. The soldier was quickly spirited away to be tried in
Russia. Thousands of Armenians took to the streets, protesting both
Russian arrogance and their own government's subservience. A
heavy-handed police response only made matters worse.
Armenia cannot afford to turn its back on Russia, but the government
is trying to draft a new association agreement with the European Union
that would be consistent with its membership of the EEU. The EU is
still interested in better commercial ties, as is America. In January,
ContourGlobal, an American power company, made a significant
investment in Armenia's energy sector.
See more here>>>
http://www.economist.com/news/europe/21646947-russian-ally-rues-its-dependence-upon-moscow-stuck-each-other
From: Baghdasarian