Armenia mired in swamp of stagnation

Armenia Materials 29 July 2015 22:00 (UTC +04:00)
The policies of the Armenian government have brought the country and the people into a swamp, and it will be very difficult to find a way out of it, even if such a thing is possible
Armenia mired in swamp of stagnation

Baku, Azerbaijan, July 29

By Azad Hasanli - Trend:

The policies of the Armenian government have brought the country and the people into a swamp, and it will be very difficult to find a way out of it, even if such a thing is possible.

The results of these policies are known to all: the dependence on Russia in all the areas, the rampant poverty, the economic crisis, the mass emigration, and so on.

The so-called 'electromaidan' has showed that the Armenians aren't going to any longer tolerate the policies of their government. After all, because of those policies the external and internal sources of Armenia's income are reducing, and the government has to take the people's last money.

Armenia's economy is in such a poor condition that even the ongoing protests don't stop the government. And as a result, after the electricity tariffs, the government is planning to increase taxes as well.

The international rating agency, Fitch Ratings is pointing out that such a decision will likely be a difficult task in social and political terms, as shown by recent protests against higher electricity prices.

In other words, the agency predicts next protests in Armenia.

Poverty in Armenia is increasing and the people are ready to fight for their last remaining money. According to a survey conducted by the Gallup International Association, people in Armenia are becoming less and less affluent.

For instance, in November 2014, only five percent of the population assessed their financial state as very poor, whereas in May 2015, the figure rose to 13 percent, i.e. more than doubled.

And the share of the population with poor financial state has increased from 18 percent to 22 percent.

However, the protestors in Armenia should think over one thing: the situation would not be so dismal, if not for the Nagorno-Karabakh conflict unleashed by Armenia. After all, in fact, Armenia deliberately severed the ties with the largest investors in the region - Azerbaijan and Turkey.

Armenian government also gradually deprives the entrepreneurs of various benefits in order to increase its own revenues. For example, according to the Water Code, 95-percent benefits were considered for fish farms and water users for economic purposes. But, the benefits were reduced by 50 percent in 2013 and now it is planned to cancel the remaining 45 percent.

Fisheries will have to pay the full amount for the use of water, which is likely to lead to a rise in price for fish products.

Experts believe that the number of participants in this market will decrease by a third, and the big players will just monopolize it.

Hard times are ahead of entrepreneurs in Armenia. But on the other hand, were there good times in this country? Recently, it became known that the French giant France Telecom has decided to leave the Armenian telecommunications market. The company is selling the 'Orange Armenia' telecom operator.

Over the past two years, the company's losses in Armenia totaled about $18 million. Local experts believe that the company is leaving due to the continuing deterioration of the economic situation and investment climate in the country.

By the way, the majority shareholding (51 percent) of the Ucom company which is negotiating on buying the 'Orange Armenia', belongs to the family of Finance Minister Gagik Khachatryan. So, it is likely that another sphere will be monopolized in Armenia. Two other operators can forget about competition.

The current situation in Armenia can be shortly described as follows: mass emigration, deep economic crisis and total dependence.


Azad Hasanli is Trend Agency's staff journalist