Armenia's Economic Pulse

[HyeSocialist]

Re: Armenia's Economic Pulse

[B]India, Armenia to sign farm pact in February[\B]

India and Armenia will sign an agreement on agriculture on February 19 when the Armenian Minister for Agriculture, Sergo Karapetyan, visits India.

Last July, India had given the go-ahead for signing and ratification of an inter-governmental agreement between the two counties.

“We are very interested in familiarising ourselves with the research and development potential of agriculture in India. We are also interested in the potential of your manufacturing and agriculture techniques. Traditionally we have been importing from Russia and Belarus. Now, our farmers are showing interest in Indian manufacturing,” Armen Martirosyan, Ambassador of the Republic of Armenia, told The Hindu on Friday.

Inviting Indian companies to invest in Armenia, he said bilateral trade between the two countries was only $70 million to $75 million while trade with China was almost $380 million. “The newly-built transport network, however, is more conducive for India,” he said.

Trilateral cooperation

“The recent lifting of sanctions might facilitate trilateral cooperation between India, Iran and Armenia,” he said at a meeting organised by FICCI.

Mr. Martirosyan said Indian companies could invest in manufacturing sector, pharmaceuticals, gems and jewellery, in the Armenian free economic zones.

A FICCI delegation focussing on the media, entertainment and tourism sector is set to visit Armenia between 15 and 19 July.

http://www.thehindu.com/news/cities/chennai/india-armenia-to-sign-farm-pact-in-february/article8146647.ece

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Definitely a nation that Armenia should work with. From attracting medical students and cooperating in IT to agriculture.

[HyeSocialist]

Re: Armenia's Economic Pulse

Jan 21 Ameriabank, Armenia's biggest bank by assets, is making plans for a potential stock market listing in London as it pursues a domestic expansion drive after a $40 million investment by the European Bank for Reconstruction and Development (EBRD).

The EBRD is taking a 20 percent stake in Ameriabank to help to support its growth by providing funds for lending to small business, big local companies and retail customers.

"Our aspiration is an IPO (initial public offering) and to try to triple our balance sheet in the next three years," Ameriabank Chairman Andrew Mkrtchyan said, adding that it has begun negotiations with investment banks to appoint an adviser with a view to listing in the next two to three years. The bank did not provide an estimate of a potential valuation.

Mkrtchyan said the bank, which has total capital of 182 million dollars and about $1 billion in total assets, is looking to further its expansion with acquisitions in its home market in the first half of the year, with the focus on profitable smaller players.

The Armenian banking sector comprises 21 lenders, serving a population of about 3.2 million people.

In addition to the EBRD investment, the World Bank's International Finance Corporation is providing a $50 million loan to help Ameriabank to boost lending to local businesses and bolster economic growth in the former Soviet republic.

Like other former Soviet states, Armenia has been hit by the economic downturn in Russia, though the International Monetary Fund said in September that it expects increased growth this year.

http://www.reuters.com/article/armenia-ameriabank-ipo-idUSL8N1541SX

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Armenia could build a financial center being in the middle of India, Iran, Russia, and the EU.

[Mher]

Re: Armenia's Economic Pulse

I didn't bother highlighting the important parts, because it's pretty much all important parts

A quick summary though
Positive conditions: favorable business climate
Negative condition: high level of external and foreign currency debt

2014 Exports: 22% Copper, 26% other metals, like gold

2015 GDP growth 2.7%

2014 Remittance were 17.5% of GDP, 14% coming from Russia
Remittance dropped 33%, meaning about a 5-6% hit to the GDP, Copper dropped 28%

Imports dropped 26%, while exports dropped 1%. MAJOR benefit to our trade imbalance which before stood at 3:1. This means its a lot closer to 2:1 now

2016 expected GDP growth 2%, 2017 2.8%


Current Account deficit
2014 4.3% of GDP, 2015 4.3%

Foreign Exchange Reserves
rose from 1.26 billion in February to 1.77 billion in December, mostly because of loans


Net external debt is 46.5%
Refinancing policy 8.75%, down from 10.25%

2014 budget deficit was 1.9%
2015 was 4%, when target was 2.3%
2016 target is 3.5%

Dollarization of deposits: 65%

Public Debt
end of 2014 stood at 43.6%, now at 47.8%

85% of govt debt stock in foreign currency

investment to GDP ration
2015 19%
2008 was 36%

Industries | Fri Jan 22, 2016 4:10pm EST Related: FINANCIALS
Fitch Affirms Armenia at 'B+'; Outlook Stable

(The following statement was released by the rating agency) LONDON, January 22 (Fitch) Fitch Ratings has affirmed Armenia's long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B+' with a Stable Outlook. Fitch has also affirmed the issue ratings on Armenia's senior unsecured foreign currency bonds at 'B+'. The Country Ceiling has been affirmed at 'BB-' and the Short-term foreign currency IDR at 'B'. KEY RATING DRIVERS The 'B+' rating reflects the following factors: Armenia's ratings are supported by its relatively high human development and governance indicators, favourable business climate and increasing economic resilience. However, they are weighed down by vulnerabilities to external shocks, high levels of external and foreign currency debt and political risks. The Armenian economy is vulnerable to external shocks and has been adversely affected by the recession in Russia and drop in global commodity prices, which caused severe financial pressure in late 2014 and a sharp contraction in domestic demand in 2015. In 2014 Russia accounted for 80% of remittances (14% of GDP), 20% of exports and 44% of FDI; while copper accounted for 22% of exports, and other metals, minerals and gold for another 26%. Total remittances dropped by 33% YoY - the equivalent of 4.5% of GDP - in the first three quarters of 2015, while copper prices were down 28% YoY in December 2015. However, Armenia has proved remarkably resilient to the magnitude of this shock, reflecting a strong trade performance, access to international financing and an effective policy response, under the aegis of an IMF programme. Nevertheless, with oil prices, the Russian rouble and copper prices well below their average 2015 levels and still under downward pressure, it is too early to declare the external shock over, in Fitch's view. Fitch estimates GDP growth was 2.7% in 2015, revised up from its forecast of 1.5% in July. It estimates domestic demand fell by 4.9%, but net trade underpinned growth. Imports dropped 26% YoY (in USD terms) in the first three quarters of 2015, while exports fell only 1%, supported by the opening of the Teghut copper mine and strong growth of agriculture output. Fitch forecasts GDP growth at 2% in 2016, before picking up to 2.8% in 2017, but the outlook depends on external conditions. The remarkable rebalancing of the economy and access to funding has eased pressures on Armenia's external finances. Fitch estimates the current account deficit narrowed to 4.3% of GDP in 2015, from 7.3% in 2014, despite the drop in remittances. Foreign exchange reserves recovered to USD1,771m in December 2015 from USD1,261m in February 2015, helped by the issue of a USD500m eurobond in March (USD300m net of the buyback of the eurobond due in 2020), USD100m from the Eurasian Fund for Stabilisation and Development as well as funding from the IMF and World Bank. Nevertheless, net external debt is high, at an estimated 46.5% of GDP at end-2015, compared with the 'B' category median of 21.5%. The dram has been fairly stable against the USD following a 14% depreciation between October 2014 and February 2015. Inflation declined to 1.2% in November 2015, and the central bank (CBA) cut its refinancing policy interest rate to 8.75% from 10.25% in October. The banking sector had a capital adequacy ratio of 15.9% as of end-October 2015 and will raise further capital to manage the increase in minimum capital ratios to AMD30bn from AMD5bn. Bank credit growth has slowed sharply after prior rapid expansion. Non-performing loans increased to 8% in October 2015, from 6.7% a year earlier, although the CBA estimates this is equivalent to 3.8% on international definitions. Nevertheless, dollarisation of deposits and loans is high at around 65%, exposing the system to exchange rate depreciation. Fitch estimates the budget deficit widened to 4% of GDP in 2015, from 1.9% in 2014 and compared with a budget deficit target of 2.3%. The deterioration reflected weaker-than-expected growth as well as policy measures to support the economy and social protection, including to eliminate the minimum profit tax, reduce the turnover tax rate, extend VAT payment dates on imports from the Eurasian Economic Union (EEU) and a subsidy to compensate some consumers for the increase in electricity tariffs. Nevertheless revenues held up well given the magnitude of the fall in domestic demand (the tax-rich part of GDP). However, the government also increased net lending to the economy, representing a quasi-fiscal policy loosening. The 2016 budget envisages a narrowing of the deficit to 3.5% of GDP, helped by an increase in excise duties in May. Public debt increased to an estimated 47.8% of GDP at end-2015, from 43.6% at end-2014, below the 'B' category median of 52%, but above the 'BB' category median of 44%. Some 85% of government debt stock is in foreign currency, exposing Armenia to exchange rate depreciation, but it has a long average maturity of 9.7 years and much of it is concessional at low interest rates. The IMF has revised down its estimates of medium potential growth to 3.5%, from 4.5%-5% before the shock, partly reflecting the outlook for Russia and commodity prices. The ratio of investment/GDP declined to an estimated 19% of GDP in 2015, from an average of 36% in 2005-2009. Armenia improved its ranking in the World Bank Doing Business Survey to 35th in 2015, from 38th in 2014, although the survey does not fully capture factors such as weak competition and geographic isolation. The government is planning reforms to the tax code and business regulations and inspections. Armenia's referendum on constitutional reform on 6 December 2015 was approved with 66.2% of votes on a turnout of 50.5%, just above the required 50% threshold. However, independent observers allege cases of irregularities. EU and US statements called on the Armenian authorities to fully investigate credible fraud allegations in a transparent manner. The constitutional amendments will reduce the powers of the presidency and increase those of parliament. Armenia's geopolitical environment weighs on the rating. The latent conflict with Azerbaijan over the disputed Nagorno-Karabakh region entails the tail risk of escalating. No resolution is expected in the near term. Armenia's close relations with Russia have been strengthened further by Armenia's accession to the EEU. However, Armenia retains strong trade access to the EU. RATING SENSITIVITIES The Stable Outlook reflects Fitch's assessment that upside and downside risks to the rating are currently balanced. The main risk factors that, individually or collectively, could trigger positive rating action are: - An improvement in external economic conditions, for example a recovery in the Russian economy, or Armenia's sustained resilience to them. - A decline in the government debt-to-GDP ratio. The main risk factors that, individually or collectively, could trigger negative rating action are: - Severe adverse spill-over from worsening economic conditions in Russia or lower commodity prices. - A marked drop in foreign exchange reserves. - Fiscal slippage leading to a significant rise in the government debt-to-GDP ratio KEY ASSUMPTIONS Fitch assumes that Armenia will continue to experience broad social and political stability and no significant escalation in the conflict with Azerbaijan regarding Nagorno-Karabakh.

http://www.reuters.com/article/idUSFit947011

[Zeytun]

Re: Armenia's Economic Pulse

I didn't bother highlighting the important parts, because it's pretty much all important parts

A quick summary though
Positive conditions: favorable business climate
Negative condition: high level of external and foreign currency debt

2014 Exports: 22% Copper, 26% other metals, like gold

2015 GDP growth 2.7%

2014 Remittance were 17.5% of GDP, 14% coming from Russia
Remittance dropped 33%, meaning about a 5-6% hit to the GDP, Copper dropped 28%

Imports dropped 26%, while exports dropped 1%. MAJOR benefit to our trade imbalance which before stood at 3:1. This means its a lot closer to 2:1 now

2016 expected GDP growth 2%, 2017 2.8%


Current Account deficit
2014 4.3% of GDP, 2015 4.3%

Foreign Exchange Reserves
rose from 1.26 billion in February to 1.77 billion in December, mostly because of loans


Net external debt is 46.5%
Refinancing policy 8.75%, down from 10.25%

2014 budget deficit was 1.9%
2015 was 4%, when target was 2.3%
2016 target is 3.5%

Dollarization of deposits: 65%

Public Debt
end of 2014 stood at 43.6%, now at 47.8%

85% of govt debt stock in foreign currency

investment to GDP ration
2015 19%
2008 was 36%

Industries | Fri Jan 22, 2016 4:10pm EST Related: FINANCIALS
Fitch Affirms Armenia at 'B+'; Outlook Stable

Thank you for the summary.

[Zeytun]

Re: Armenia's Economic Pulse

The IT sector in Armenia has grown by 25% per year


This article has been translated from Russian to english using google
IT sector of Armenia in 2015 increased by 25%. According to the strategy of development of information technologies in 2018 the turnover of IT sector will reach $ 1 billion.

Revenues from the IT sector in Armenia in 2015 increased by 25%. This figure was announced executive director of the Union of Information Technology Enterprises (UITE) Karen Vardanyan. He added that these figures show that in recent years the IT sector in the country is steadily growing, "This is the average growth of the IT industry over the past decade. The exception was 2009, when the growth was 14%. "

Director of UITE growth trend explained by the fact that the IT industry in Armenia increasingly focused on exports. In addition, he said, the world continues to grow demand for programmers, engineers and other related specialties.

"The number of vacancies in the IT sector worldwide today is about two million. By 2018, this figure could rise to three million. The more specialists we prepare, the more work ", - says Vardanyan.

Head of UITE also noted that the positive impact on the IT sphere of Armenia will provide the World Congress on Information Technology (WCIT), which was first held in Yerevan in 2019. At the Congress will come to high-level representatives of leading IT companies from 80 countries. The event of this scale will give the chance to the Armenian IT companies to present their products. One of the objects of pride of the Armenian IT sector, according to Vardanian, is a project to equip schools specialized incubators in which students can conduct experiments.

"The Congress will allow Armenian IT companies to expand international cooperation. Our trump card may be the presence of engineering labs in all schools in Armenia. By 2019, we will be the only country in the world, in which all schools will be equipped with such laboratories "- said Vardanyan.

Organization of Congress will cost $ 3 million. According to statistics, in 2015, Armenia has about 500 IT companies. The share of IT sector in Armenia's GDP is about 4%. According to the strategy of development of information technologies in 2018 the turnover of IT sector will reach $ 1 billion.

[Zeytun]

Re: Armenia's Economic Pulse

Experts on Iran discuss idea of Armenia becoming “Hong Kong”

http://www.mediamax.am/en/news/society/16815/

Yerevan /Mediamax/. Yerevan State University (YSU) Chair of Iranian Studies Department Vardan Voskanyan is confident that cooperation between Armenia and Iran will gain new scope and speed.

In an interview with Mediamax, Vardan Voskanyan observed that after lifting of sanctions, Armenia would play a highly significant role in the context of Iran opening to the world, which could already be noticed.

According to the expert, Armenia and Iran are very familiar with one another by tradition. The same cannot be said about Iran and Europe or Russia relations.

“Therefore, Armenia can play a substantial role in the context of relations with Iran, performing as a “gate” to Iran or as an important joint between Iran and Europe, Iran and Russia. Moreover, with our country’s potential in Iranian studies Armenia can provide certain expertise to representatives of countries unfamiliar with Iran in a number of areas, including the culture of the country”, noted the expert, commenting on Mediamax’s request the idea of businessman and philanthropist Ruben Vardanyan about Armenia becoming a “Hong Kong” for Iran.

In regards to opportunities of the tourism sector, Vardan Voskanyan noted that Armenia could be an attractive destination for Iranian tourists.

“Tourism can become a very important direction for our country. Armenia is attractive for Iranian tourists, and their numbers can be notably increased. We should also consider that tourists coming from Europe and Russia can use Armenian roads to enter Iran. From this point of view, Armenia can turn into an important platform,” said the expert and added that in this case high prices for airplane tickets would remain the only obstacle.

Senior Researcher at Institute of Oriental Studies of Armenian National Academy of Science Gohar Iskandaryan believes that certain ideas expressed by Ruben Vardanyan can “truly work”.

“I share those views, especially the idea to use Armenia’s advantages of being a EAEU member and having privileged trade relations with EU. In this context, Armenia can arrange it with Iran to transfer their semi-finished product to our country and complete the manufacture here. With “Made in Armenia” labels attached to the product, it can be easily exported to the markets of EAEU and EU member countries. I believe this will be profitable for both countries,” the expert told Mediamax.

Gohar Iskandaryan feels somewhat reserved about Ruben Vardanyan’s suggestions on new perspectives in the tourism sector for Armenia. According to her, in recent years Georgia has become more attractive for Iranian tourists due to more affordable services and reasonable prices.

“Armenia is more of a transit country for Iranian tourists who get to Georgia through our territory,” said the expert.

Gohar Iskandaryan noted that for Armenia to become a regional hub it would need political will from both countries and large financial means to bring joint Armenian-Iranian projects to life. On the way to that goal, first of all Armenia should have high quality road, railway and airway infrastructure.

“With Iran, we can implement numerous cooperation projects in favor of Armenia. From this standpoint, I agree with Ruben Vardanyan,” said Gohar Iskandaryan.

I agree with the fact that georiga and Azerbaijan are more attractive to Iranian tourist given the fact that both countries have resort areas on the sea.
The government should work hard to find out ways to maximize the benefits. Buildings new industries, casinos, there are so many things we can do,they need to research and see what is feasible and healthy.

[Mher]

Re: Armenia's Economic Pulse

Product of ElectricYerevan movement

Armenian Power Grids ‘More Efficient’ Under New Ownership


The new owner of Armenia’s debt-ridden electricity distribution network has reduced its massive losses within months after buying it from a state-controlled Russian company, Energy Minister Yervand Zakharian said on Wednesday.

Meeting with visiting executives of the Moody’s credit ratings agency, Zakharian praised the change of ownership and a resulting series of “measures” which he said have been taken at the Electricity Networks of Armenia (ENA) utility. “As a result, electricity losses there have decreased,” he said, according to his press office.

Those losses are now “close” to a 11.2 percent limit set by Armenian state utility regulators, added the minister. This has contributed to the “financial stability” of the country’s overall energy sector, he said.

The Tashir Group of Samvel Karapetian, a Russian-Armenian billionaire, acquired the ENA from Inter RAO, a Russian energy giant, in a deal completed in October. Karapetian pledged to make the troubled utility “much better under our management.”

“It will become profitable,” the Armenian-born tycoon said in December.

The ENA had incurred mounting losses since 2010 despite repeated increases in electricity prices approved by the regulators. It had $220 million in outstanding debts to Armenian power plants and commercial banks as of September.

The most recent electricity price hike announced by Armenia’s Public Services Regulatory Commission (PSRC) in June 2015 sparked two-week demonstrations in Yerevan. They forced the Armenian government to keep the energy tariffs unchanged for most households and some small businesses through a subsidy.

The protests were driven by a widely held belief that Armenians are being made to pay for widespread corruption within the ENA management. While defending the tariff rise, government officials acknowledged that the power grids have been mismanaged by the Russians.

In an October statement, Karapetian vowed to crack down on “corrupt employees,” modernize Armenia’s power distribution facilities and thereby cut ENA losses. That, he said, would enable the company to avoid further price hikes in the future.

The ENA is now reportedly managed by Kaskad-Energo, a Russian energy firm which is part of Tashir Group. Kaskad-Energo specializes in manufacturing low-voltage electric equipment and installing it at residential and office buildings and industrial enterprises.

http://www.azatutyun.am/content/article/27558427.html

[Mher]

Re: Armenia's Economic Pulse

Georgia, Iran In Fresh Talks On Energy Supplies Via Armenia

Georgian Energy Minister Kakha Kaladze called for mutual supplies of electricity between Georgia and Iran through Armenia at the start of a visit to Tehran on Tuesday.

Kaladze was scheduled to meet with his Iranian counterpart Hamid Chitchian and other senior Iranian officials for fresh talks expected to focus on the possibility of Iranian natural supplies to Georgia through a pipeline running across Armenia.

“When we have a surplus of water and hydropower in the spring and summer periods, Iran needs electricity and imports it from Armenia,” Kaladze said in comments to the Georgian Energy Ministry’s press office cited by Russian news agencies.

“We have a possibility of selling electricity to Iran through Armenia [during spring and summer months] and import it from Iran in the winter period -- when electricity consumption is at its peak -- through Armenia,” he added before the planned talks with Chitchian.

Kaladze, Chitchian, Armenian Energy Minister Yervand Zakharian as well as the chief executive of a Russian electric utility already met in Yerevan in late December to explore ways of significantly boosting power supplies among their countries. Zakharian said afterwards that their countries could do that after two new power transmission lines connecting Armenia with Georgia and Iran go on stream in 2017-2018.

The Georgian and Iranian governments also reportedly negotiated around that time on possible Iranian gas supplies to Georgia via Armenia. The head of the Iranian National Gas Export Company, Alireza Kameli, claimed in early January that two sides have already reached a tentative agreement on the matter.

Georgia has purchased the bulk of its gas from Azerbaijan for the past decade. The Georgian government announced in October that it is now considering buying gas also from Russia or Iran.

Kaladze told journalists in Tbilisi on Monday that the gas supplies will be on the agenda of his trip to Iran. He reiterated that Georgia could soon import Iranian gas via Armenia or Azerbaijan.

“We must make the most of this country’s resources,” the Georgian minister said in Tehran. “We must do everything to implement new and interesting projects.”

http://www.azatutyun.am/content/article/27555926.html

[Mher]

Re: Armenia's Economic Pulse

Peace With Azerbaijan, Turkey ‘Not Vital For Armenia


Emil Danielyan
Հրապարակված է՝ 16.02.2016

The resolution of the Nagorno-Karabakh conflict and normalization of Turkish-Armenian relations are not a necessary condition for Armenia’s sustainable development, according to President Serzh Sarkisian.

In a speech delivered in Yerevan late last week, Sarkisian also indicated that Armenians should not expect to have peace with Azerbaijan and Turkey in the foreseeable future. The two Turkic nations will remain an “impassable quagmire” for Armenia, he said.

“The notion that we will not prosper as long as the Karabakh problem is unresolved and the Turkish blockade [of Armenia] is not lifted is unacceptable,” Sarkisian told senior government officials, lawmakers and judges. “That is not the reason for problems with governance in our country.”

Ankara and Baku, Sarkisian stressed, have failed and will fail to clinch unilateral Armenian concessions with their long-standing pressure on Yerevan.

“We have been living in these conditions for 25 years,” he went on. “We have already grown accustomed and adapted to these conditions. We do not and will not link chances of our progress with solutions to these problems.”

The issue brought up by Sarkisian was hotly debated in Armenia in 1997-1998 during the final months of President Levon Ter-Petrosian’s rule. Ter-Petrosian publicly advocated more Armenian concessions to Azerbaijan at the time, saying that Armenia will not be able to recover from its post-Soviet economic collapse without a Karabakh settlement.

Sarkisian, then a minister of interior and national security, was among key members of Ter-Petrosian’s cabinet who openly challenged his view. The resulting government infighting culminated in Ter-Petrosian’s resignation in February 1998.

Many Western policy-makers and analysts likewise asserted throughout the 1990s that Armenia’s economic development hinges on the reopening of its borders with Azerbaijan and Turkey. They said this would make the landlocked country far more attractive to foreign investors and reduce high transportation costs incurred by Armenian exporters.

Yet despite the closed borders, economic growth in Armenia accelerated in the following years, hitting double-digit rates from 2001 until the global financial crisis of 2008-2009.

In 2006, the then head of the World Bank office in Yerevan, Roger Robinson, admitted that the rapid growth has taken Armenia’s Western donors by surprise. Over the past decade, the donors have put the emphasis on improvement of the domestic business environment in their policy recommendations made to the Armenian authorities. Economic implications of the disputes with Azerbaijan and Turkey have rarely been mentioned by them in public statements.

In his speech, Sarkisian asserted that Yerevan remains committed to continuing the difficult search for Karabakh peace. But, he said, the Karabakh Armenians’ right to self-determination -- a euphemism for international recognition of their secession from Azerbaijan -- must be the key element of a peace deal.

By contrast, Baku insists on a restoration of Azerbaijani control over Karabakh. The Turkish government backs this stance, making such a settlement a precondition for establishing diplomatic relations with Armenia and opening the Turkish-Armenian border.

“At the moment, I see no possibility of any progress in relations with Turkey,” said Sarkisian.

“We must come to the terms with the fact that we have no real partners east of [the Karabakh towns of] Martakert and Martuni and west of Gyumri and Armavir (Armenian towns close to the Turkish border) … Let us think that there is a bottomless and impassable quagmire over there,” concluded the Armenian president.

http://www.azatutyun.am/content/article/27555552.html

[Haykakan]

Re: Armenia's Economic Pulse

Peace With Azerbaijan, Turkey ‘Not Vital For Armenia


Emil Danielyan
Հրապարակված է՝ 16.02.2016

The resolution of the Nagorno-Karabakh conflict and normalization of Turkish-Armenian relations are not a necessary condition for Armenia’s sustainable development, according to President Serzh Sarkisian.

In a speech delivered in Yerevan late last week, Sarkisian also indicated that Armenians should not expect to have peace with Azerbaijan and Turkey in the foreseeable future. The two Turkic nations will remain an “impassable quagmire” for Armenia, he said.

“The notion that we will not prosper as long as the Karabakh problem is unresolved and the Turkish blockade [of Armenia] is not lifted is unacceptable,” Sarkisian told senior government officials, lawmakers and judges. “That is not the reason for problems with governance in our country.”

Ankara and Baku, Sarkisian stressed, have failed and will fail to clinch unilateral Armenian concessions with their long-standing pressure on Yerevan.

“We have been living in these conditions for 25 years,” he went on. “We have already grown accustomed and adapted to these conditions. We do not and will not link chances of our progress with solutions to these problems.”

The issue brought up by Sarkisian was hotly debated in Armenia in 1997-1998 during the final months of President Levon Ter-Petrosian’s rule. Ter-Petrosian publicly advocated more Armenian concessions to Azerbaijan at the time, saying that Armenia will not be able to recover from its post-Soviet economic collapse without a Karabakh settlement.

Sarkisian, then a minister of interior and national security, was among key members of Ter-Petrosian’s cabinet who openly challenged his view. The resulting government infighting culminated in Ter-Petrosian’s resignation in February 1998.

Many Western policy-makers and analysts likewise asserted throughout the 1990s that Armenia’s economic development hinges on the reopening of its borders with Azerbaijan and Turkey. They said this would make the landlocked country far more attractive to foreign investors and reduce high transportation costs incurred by Armenian exporters.

Yet despite the closed borders, economic growth in Armenia accelerated in the following years, hitting double-digit rates from 2001 until the global financial crisis of 2008-2009.

In 2006, the then head of the World Bank office in Yerevan, Roger Robinson, admitted that the rapid growth has taken Armenia’s Western donors by surprise. Over the past decade, the donors have put the emphasis on improvement of the domestic business environment in their policy recommendations made to the Armenian authorities. Economic implications of the disputes with Azerbaijan and Turkey have rarely been mentioned by them in public statements.

In his speech, Sarkisian asserted that Yerevan remains committed to continuing the difficult search for Karabakh peace. But, he said, the Karabakh Armenians’ right to self-determination -- a euphemism for international recognition of their secession from Azerbaijan -- must be the key element of a peace deal.

By contrast, Baku insists on a restoration of Azerbaijani control over Karabakh. The Turkish government backs this stance, making such a settlement a precondition for establishing diplomatic relations with Armenia and opening the Turkish-Armenian border.

“At the moment, I see no possibility of any progress in relations with Turkey,” said Sarkisian.

“We must come to the terms with the fact that we have no real partners east of [the Karabakh towns of] Martakert and Martuni and west of Gyumri and Armavir (Armenian towns close to the Turkish border) … Let us think that there is a bottomless and impassable quagmire over there,” concluded the Armenian president.

http://www.azatutyun.am/content/article/27555552.html

You have to admire what the actions of the likes of Serj and Kocharian have resulted in when it comes to geopolitics. They refused to compromise our core interests despite seemingly insurmountable odds. I wish I could say the same for their domestic policies.