Elmira Tariverdiyeva, commentator at the Trend European Desk
Yerevan must be ready for worsening of the economic situation after "black Tuesday" when the Central Bank of Armenia's announcing floating rate of the American dollar provoked a panic in the country. The resolution of the Nagorno-Karabakh conflict, which has turned the country into a social outcast, is the only chance to save Armenia's collapsing economy
Armenian is violating international norms and principles and Azerbaijan's territorial integrity to the detriment of the Armenian people.
Yesterday everything fell into place. The exchange rate was 305-306 dram to dollar and dollar was sold at 309 dram at early morning of Tuesday while these indicators reached 350 and 390 respectively later that day. Armenian currency's sharp depreciation was followed by a price rise on medicaments. Some drug stores in Yerevan closed down a day before and today. The drug store workers say the price on medicaments will increase 20-30 percent once they are opened.
Price on fuel, sugar, oil and other essential goods saw a rise as well. Some shops have closed down for the time being. These are just preliminary consequences of the financial crisis in one country which has been isolated from the two neighbor countries due to its political ambitions.
The International Monetary Fund says Armenian economy will further fall 1.5, the IMF permanent representative in Armenia Ninke Omes said on March 3. IMF forecast came after fall in prices on metal, Armenia's key export item and fall in remittance to the country, ArmInfo reported.
Omes attributed fall in remittance to the hard economic situation in Russia from where Armenia receives great part of remittances. She also noted drop in direct investments coming mainly from Russia who handles financial crisis with difficulty itself.
Moreover, delivery of cargo from Russia to Armenia via Georgia has been complicated in wake of the August war in Tskhinvali due to Tbilisi's unwillingness to transit Russian goods via its territory.
Considering options for reconciliation between Baku and Yerevan on the basis of Azerbaijan's conditions, it is clear that this would give a strong impetus and enormous benefits to Armenia's pulling down economy.
For the first time over the last 15 years, Armenia could have restored the communication with Turkey and Azerbaijan that would increase Yerevan's trade turnover. Now, Armenia has open border only with two countries of the region.
Ankara has repeatedly stated that the Armenia-Turkey ties could only be improved through regulation of the Nagorno-Karabakh conflict.
Yerevan depends on Iran due to lack of economic relations with Ankara and Baku. And Iran lays out tariffs on fuel and energy resources in favor of the country.
Opening of the borders would have ensured resumption of trade with two neighbors, which would secure Armenia of "Black Tuesdays".
Another "enduring pain" of Yerevan is its isolation from all the transport and energy projects the region.
If Yerevan to make concessions to Baku in resolving the Nagorno-Karabakh conflict, then railway between Azerbaijan and Armenia will operate that may benefit Armenia's economy.
The railway communication with Ankara will simplify the export and import of goods to Europe, compared to the current transport through the Georgian port of Poti.
Its is time for Armenia to prevent collapse of economy through giving up its political ambitions and liberating the occupied territories of Azerbaijan.
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