“Have the prices for apricots in the world fallen?” one may ask. After all, it is the only “strategic” resource Armenia has.
Well, how could a fall in oil prices affect the country, which has nothing, and why have all international institutions lowered the economic rating of Armenia? Everything is not so simple. Armenia lives not on income but on handouts, and if still somebody became poor through giving alms (sanctions have consequences for everyone), the one, who always begs, starts to have serious problems.
But first things first.
Armenia does not see the need to revise economic growth forecast for 2015, despite its decrease by international financial institutions, minister of the country’s economy Karen Chshmaritian told Reuters April 22.
He said that Yerevan expects the influx of more than $2 billion as foreign direct investment. However, the catch is that no investor has the slightest reason to invest in the Armenian economy. The main international authority, the International Monetary Fund, in April lowered its forecast for economic growth in Armenia for 2015 to zero from 3.3 percent. The World Bank also expects a weak or negative economy growth of the “Apricot Republic” in 2015. With this in mind, it is difficult to imagine an investor-suicide who wants to invest in the fading economy of the country.
And over time, the situation will only aggravate. The fact is that poor economy of Armenia has focused on consumption, rather than production since the Soviet period. It existed during the years of independence through the handouts of the Armenian diaspora mainly from Russia, the US and France. Alas, it is not worth waiting for their assistance today. These countries have less income themselves due to the fall in oil prices and sanctions against Moscow.
Moreover, Armenia faced such a situation that the men working in Russia simply cannot transfer money home. They lost their jobs because of the financial crisis in Russia, aggravated by the fall in oil prices and the Western sanctions imposed due to Moscow’s position on Ukraine.
The Armenian dram, gently tied to the ruble, dropped after the ruble. Armenia’s participation in weak trade union with Russia, Belarus and Kazakhstan does not contribute to its possible cooperation with the EU.
The fact that the economic crisis will lead to the political crisis is beyond doubt. According to the constant burst of information of the Armenian media, the majority of the representatives of Armenia’s executive branch are lurking in anticipation of changes.
According to the Zhoghovurd newspaper, most of the ministers are in anticipation as there are persistent rumors on the sidelines that the government of Armenia will be changed soon. Many people are trying to find mediators to keep their positions.
To tell the truth, this will unlikely to help a country which has been on the edge of the economic abyss for many years and ready to collapse since the beginning of the year.
Trend commentator Elmira Tariverdiyeva
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follow the author on Twitter @EmmaTariver
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