Armenia's Economic Pulse

[Federate]

Re: Armenia's Economic Pulse

Awesome.
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Good Business in Garbage: Vanadzor to create recycling plant


While the global economic crisis continues to devastate enterprises worldwide, authorities in Vanadzor have announced a business project unprecedented for Armenia.

Vanadzor (population 100,000) has been chosen as site of a plastic recycling plant – a first for Armenia and the entire Caucasus.

“We will reduce non-degradable wastes,” says Suren Karapetyan, head of the Department for Programs and External Relations, Vanadzor Municipality, adding that modern technologies and methods will be used. “Non-biodegradable wastes that remain in the soil will be recycled, enabling us to open new employment opportunities and clean the city,” Karapetyan says. The new enterprise will create at least 20 jobs in the plant( with more people to be hired to collect the plastic throughout the city).

In partnership with GTZ (an international cooperation enterprise for sustainable development with worldwide operations)Vanadzor Municipality aims at clearing the city’s streets of household waste and plastics, as well as making recycling a common and useful occurrence in Armenia. As with other cities and villages of Armenia, plastic containers including cellophane shopping bags are a blight on the landscape and an eyesore.

The municipality has announced a competition for the best business project and will choose the winner by mid-February. The German company will grant the winner €12,000 (4.7 million drams)to buy necessary equipment.

Vanadzor’s business circles are discussing the municipality’s plan and some of them are already going to submit their projects to local authorities.

Businessman Aharon Makaryan, director of Marmos Ltd, (A Vanadzor-based company dealing with trade, real estate, internet clubs) is getting ready for the competition.

Makaryan’s business project focuses on recycling technologies, as well as on how to use the recycled waste. However, the businessman prefers maintaining confidentiality.

He unveils his plans only partially, saying the plastic containers will first undergo grinding, then they will be washed and dried at a certain level of humidity. The enterprise will use the primary product to manufacture nonfood products.

“Waste recycling is not a profitable business, but using recycled products in industry is truly beneficial,” Makaryan says.

Being sure of his company’s victory, the entrepreneur has purchased necessary equipment and installed them at the site of his “future enterprise”. He hopes to buy the rest of the facilities with the help of the German company’s grant.

He has even consulted with GTZ specialists about recycling technologies. The businessman has also met with the workers of the Vanadzor-based Polymer-Glue Research Institute (which produced polymer goods, like dye, glue, etc.) to discuss with them how to make a better use of the recycled waste.

“If they (the jury of municipal experts) decide to finance another project, the German grant will hardly be enough for them to procure equipment. No one except our company has necessary facilities to build a production line,” Makaryan says, underlining his company’s privileges, including threshers, cleaning and drying machines and necessary production line.

Felix Chilingaryan, president of Lori region’s Union of Employers believes in the success of the first waste recycling project in Vanadzor, taking into account the city’s industrial achievements in the past.

“Let’s not forget that Vanadzor was once a large industrial city with brilliant specialists,” he says. Though the new enterprise is unlikely to lack for professionals, if necessary, foreign specialists will be invited.”

Meanwhile local authorities say they are going to give preference to the most realistic, profitable project that will help clean the city and nearby forestlands from plastic waste.

Authorities do not deny that the four trash collecting companies currently working are scarcely able to clean the city from its rubbish.

Lyova Melikyan, head of the Department for Public Services, Vanadzor Municipality believes the waste recycling enterprise will make the trash-cleaning task easier. At the same time he blames residents for not throwing garbage into the trashcans and leaving trash bags in nearby areas instead.

The overfilled Vanadzor dump, located in Arjut village, (15km outside Vanadzor) was built 18 years ago. Around 25 trash collecting trucks with four cubic meters each transport household waste from Vanadzor to the Arjut dump every day, with plastic containers constituting about 20 percent of the rubbish.

Melikyan believes the new recycling enterprise will help spare about five garbage trucks.

The municipal authorities plan to raise public awareness of the issue, explaining to residents the importance of separating plastics from household waste and plan to place recycling bins for plastics.

http://armenianow.com/?action=viewArticle&AID=3519&CID=3391&IID=1220&lng=eng

[Federate]

Re: Armenia's Economic Pulse

Silk Road on Rails?: Armenia-Iran railway gaining speed – at least in debate



A railway that would join Iran and Armenia appears to be nearing reality. Armenian authorities say the Iran-Armenia railway is the government’s top priority, as the crucial communication route would provide land-locked and border-restricted Armenia with a link to the outside world that is currently severely missing.

Experts on trade communication say the complex geopolitical and economic realities of the region and indeed the world have caused official Yerevan to fast-track negotiations.

“The railway has a strategic importance for Armenia and we should have launched its construction shortly after the country gained independence,” Garnik Asatryan, chair of the Department of Iranian Studies, Yerevan State University, told ArmeniaNow.

Iran-Armenia railway needs foreign investments to become a reality
According to preliminary calculations, the railway construction may cost around $2 billion and will last five years. The railway will be 540 km long, with 480 km of the main line passing trough Armenia’s territory, RA Deputy Minister of Transport Hrant Beglaryan said, citing the project’s feasibility.

Pending results of the study, construction of Armenia’s section could begin mid-year.

“If Armenia implements its part of the agreement, the Iranian railways will have no difficulty building a 60 kilometer-long section,” the minister said in a January 19 interview to Gudok, the official newspaper of the Russian Railways.

Director of the Iranian Railways Hasan Ziyari said his side stands ready to participate in the railway construction. Emphasizing the project’s importance for Armenia and Iran, he said it is among Iran’s top priorities.

There are three possible routes for the railways. As Armenian minister of Transport ?? Gurgen Sargsyan says, the most preferable for Armenia is the route, which starts from Gagarin’s village ( from the existing railway station (Gegharkunic province)) then will goes through towns Gavar, Martuni to Jermuk (Vayots Dzor province) then to Meghri (Syunic province, border with Iran). The remaining 60 km of railway will pass through Iran territory.

Experts say the two major hindrances for the project are the U.S.
barrier and lack of funds. They believe U.S. Secretary of State Hillary Clinton’s statement during the January 13 Senate hearings about the U.S. administration considering a new approach to relations with Tehran has made Armenia more optimistic about the project.

“I don't think we have any problems with the US. Washington has never hindered Armenia's relations with Iran. Moreover, Armenia is the only country in the region in this context,” said Sergey Minasyan, deputy director of the Caucasus Institute.

According to Armenia’s Prime Minister Tigran Sargsyan, the Asian Bank for Development (ADB) has allocated around $1.5 million for Iran-Armenia railway’s feasibility study.

According to Minasyan, the government’s priority task is to attract foreign investments to implement the project.

He was quoted as saying: “The Armenian government must arouse the interest of offshore investors. China and ADB are among potential investors and this may herald a new Silk Route.”

(The Silk Road is the trade network of 7000 km, existed till the XVI century, connecting Eurasian counties, from Western Europe to China)
Russia is likely to take a keen interest in the project, taking into account that the Russian Railways is the operator of the Armenian Railway.

“If the financial crisis did not hit the global economy, Russia would obviously take an active participation in the project. Since the Russian Railways is the concessionaire of the Armenian Railway, Russia is to render a financial assistance to the project by all means,” Minasyan said.

According to professor Asatryan, no matter how attractive, Armenia’s neighbors are unlikely to support the project, as it contradicts their political interests.

“This grants Armenia a direct access to the outside world, particularly, to the Persian Gulf,” Asatryan said, adding Turkey, Georgia and Russia are unlikely to hold Armenia’s interests (although the Russians will operate the line).

Armenia’s premier says the best time to launch the railway construction is late this year. However, everything depends on the project’s feasibility study.

http://armenianow.com/?action=viewArticle&AID=3514&CID=3389&IID=1220&lng=eng

[jgk3]

Re: Armenia's Economic Pulse

great news Fed, I'm enthusiastic about the growing possibilities some smart entrepreneurial ideas can provide for Armenia.

[KanadaHye]

Armenia to join GSP+ in 2009

/PanARMENIAN.Net/

The European Union offered Armenia to join the new GSP+, which grants duty-free access to the EU for approximately 7,200 products (natural juices, fruits, vegetables, etc.) from small and vulnerable countries that have ratified the major multilateral environmental agreements (MEAs) as well as key human rights and governance agreements.

Generalized System of Preferences (GSP) is the system of preferential trading through which the EU extends preferential access to its markets for imports from developing countries.

“In 2007, the GSP allowed Armenia to export over 2000 names of goods at reduced rate to the EU member states and save 120 million euro of the impost fee,” Armenian Deputy Minister of Economy Mushegh Tumasyan told a news conference in Yerevan.

“GSP+ will help Armenia increase commodity turnover and represent its brand in the world market,” said Gagik Markaryan, executive director of the republic’s union of employers.

[Federate]

Re: Armenia's Economic Pulse

As a side note, great to see that Armenia Reporter has started utilizing the true and undisputed map of Artsakh. Good job to them and I hope more will follow!
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Is there a place for Armenia in regional energy projects?

Nabucco is seen as one of Europe’s best hopes for limiting its dependence on Russian gas


The Nabucco project would take natural gas from Erzurum to Austria. Some of that gas would come from the Baku-Tbilisi-Erzurum pipeline, which runs in the same corridor as the Baku-Tbilisi-Ceyhan oil pipeline. But additional capacity is needed. Additional gas could flow from Turkmenistan or Azerbaijan through a new pipeline. The route shown through Karabakh and Armenia is among the options.

......

Armenian perspectives

Sevak Sarukhanyan of the Yerevan-based Noravank Foundation is an expert in energy issues. He thinks that there will be no a gas pipeline from Azerbaijan to Turkey passing through Armenia.

"Even if Armenia and Azerbaijan solve the problem of Nagorno-Karabakh, they can't create a real climate of trust in bilateral relations during the coming years. In this case, any kind of expensive and strategic project like a pipeline construction can't be realized between the two nations," he told the Armenian Reporter.

Sergey Minasyan, political scientist with the Yerevan-based Caucasus Institute, said, "Theoretically, of course, it is possible, in particular if we take into consideration Georgia's communication risks after the five-day war. Besides, the current phase in Armenian-Turkish relations also raises certain hopes. Nevertheless, on the other hand, the principal and only obstacle is Azerbaijan's stance. It is unlikely that Baku will give its approval and it seems pointless to wait if there is no strong external pressure. If the pressure comes only from the West, then Baku always has the opportunity to lean toward Russia. The latter would be only too happy to be able to torpedo the construction of the gas pipeline in this way," he said.

Masis Mayilian, president of the Public Council for Foreign and Security Policy, based in Stepanakert, and former deputy foreign minister of Karabakh, notes that the only obstacle is the absence of political will in Azerbaijan's leadership.

"And here the efforts of the interested parties are necessary to convince the Azerbaijani establishment. Turkey and other interested countries can persuade Azerbaijan to withdraw from its baseless political ambitions. Whatever the choice of route for the pipeline, the investors must consistently push Azerbaijan's administration to not use the profits from Nabucco to finance a new military aggression against the Nagorno-Karabakh Republic. In that case the investors in the project will bear partial responsibility for the catastrophic results of a possible war since, instead of increasing the well-being of the region's population, the profits gained from their investments would be used to finance Azerbaijani aggression," Mr. Mayilian told the Armenian Reporter.

From an economic point of view, running the pipeline though Karabakh and Armenia is very profitable, as it is the shortest route, Mr. Mayilian added.

"Apart from that, it is the safest and, from a political point of view, the smartest route, since for one of the leading players in the region, Russia, it will be easier to ‘digest' the fact that Nabucco passes through the territory of its strategic ally Armenia, than the Georgian route," he said.

Armen Manvelian is an expert on Caucasian pipelines and a political scientist with the Yerevan-based Azg daily. He told the Armenian Reporter that the true opportunities of the Nabucco project and the discussion around it do not correspond to each other.

"First of all, to date it is not certain what gas will flow through this pipeline. If it is Azerbaijani, then Azerbaijan does not have sufficient capacity. Apart from that, when the volume of gas consumption in Europe is taken into consideration (about 500 billion cubic meters per year), it becomes clear that it cannot have a significant effect on the market. As far as Central Asian gas in concerned, then constructing a gas pipeline under the Caspian Sea is also highly improbable, and so the only real alternative for the Nabucco project can be Iranian gas. However, in this case there are different obstacles: U.S.-Iran relations, Turkey's stance, the Kurdish issue, etc," Mr. Manvelian said.

What is the price, if any, that Armenia would have to pay for the gas pipeline to pass through Armenia and Karabakh?

"Truly the price can only be Karabakh, but just like both ex-presidents of Armenia: Levon Ter-Petrossian and Robert Kocharian, likewise Serge Sargsian also will not take that step," Mr. Minasyan told the Armenian Reporter.

If the gas pipeline passes though Armenia, then it is not we who have to pay them, but they who must pay us, said Mr. Manvelyan.

"For example the Baku-Ceyhan pipeline annually brings Georgia about $50 million in income. In other words, it does not make a significant difference to that country's economy. Instead that country has found itself in the middle of a competition between the West and Russia with all the consequences arising from it. The dream of small states, that they might achieve serious political clout through such pipelines, is an illusion. This is a game in global politics, where the rules of the game are dictated from outside and are changed at the will of the powerful states. And so, states like Georgia and Armenia never have the chance to win in this game; they are constantly the losers. In other words, it is necessary to consider whether or not it is worth it to put our heads on the block," Mr. Manvelyan added.

Mr. Mayilian also took the position that Armenia and Karabakh need not pay a price.

"If Nabucco passes through the Nagorno-Karabakh Republic and Armenia, then all participants in the project will benefit from that, and Azerbaijan more so. That country will get a new chance to export its energy resources to Europe with a new, alternative route, which, apart from being economically profitable, will allow Azerbaijan to be politically independent under stable conditions," he said.

Besides, Mr. Mayilian thinks the Nabucco project is very profitable for Karabakh and Armenia, since they will gain new allies for securing peace and stability in the region.

"This group of allies includes investors in the project, gas exporters, transit countries, and, finally, the gas-consuming European countries. Geographically there are several countries situated between Central Asia and Europe. We are not even talking about the fact that from a political point of view, the United States is an interested party in Nabucco's success, and therefore, in the stability of the Southern Caucasus."

More here http://www.reporter.am/go.cfm?path=/...-projects&pg=3

[Federate]

Re: Armenia's Economic Pulse

Armenian Importers Urged To Switch To Manufacturing

By Emil Danielyan

Prime Minister Tigran Sarkisian urged Armenia’s leading importers of goods on Saturday to help his government cope with the effects of the global economic crisis by switching to manufacturing operations and creating jobs.

Sarkisian made the extraordinary appeal at a meeting with a group of wealthy entrepreneurs involved in import and shipping operations. His office did not name any of the participants of the meeting held behind the closed doors.

A government statement cited him as promising “maximum support” and “exceptional opportunities” for those of them who will open manufacturing firms. He said those firms can be as profitable as their current businesses.

Large-scale imports of basic foodstuffs, fuel and other commodities is one of the most lucrative forms of economic activity in Armenia. They have effectively been monopolized by a handful of wealthy entrepreneurs close to President Serzh Sarkisian and his predecessor Robert Kocharian. Both men have long faced opposition allegations that they personally benefit from the existence of the monopolies.

The allegations, denied by them, have gained fresh currency in recent months amid the Armenian authorities’ apparent efforts to shore up the national currency, the dram, with substantial hard currency injections in the domestic financial market. Unlike many other currencies, the dram has not weakened against the U.S. dollar since the onset of the global downturn. The importers are seen as key beneficiaries of the exchange rate stability.

According to the government statement, Prime Minister Sarkisian said that the importers have operated in a “quite favorable environment” until now but that the global recession “makes it imperative for the importers to change their behavior.” Whether he hinted at government measures that will make commodity imports less lucrative was not clear. The Armenian premier said last month that large companies owned by government-connected tycoons will be “the number one target” of his government’s fight against tax evasion in 2009.

The statement said some of the importers presented investment proposals at the meeting. But it gave no details, saying only that Sarkisian encouraged participants to come up with more business plans. He also said that job creation in the manufacturing sector is “one of the important anti-crisis measures” planned by the government.

Armenia’s trade deficit reached a new high of $3.3 billion last year on the back of a 35 percent surge in imports. Armenian exports, by contrast, shrunk by 7.2 percent to $1.1 billion, their sharpest decline in over a decade.

http://www.armenialiberty.org/armeniareport/report/en/2009/02/959A6A08-225E-4460-9B33-366F5F531B07.ASP

[KarotheGreat]

Re: Armenia's Economic Pulse

ARMENIA BEST ROUTE FOR IRANIAN GAS TRANSIT TO EUROPE


The recent events have considerably affected the situation in the Caucasus, an Armenian expert said. “Implementation of regional projects bypassing Armenia is now questioned. Tensions over South Ossetia still persist. Besides, the transit route through Georgia is too expensive and can be easily replaced by Armenia,” Vahan Dilanyan told a news conference today. “At the same time, Azerbaijan’s bellicose statements and ongoing increase of the defense budget make an impression that it can follow Georgia’s ways. Besides, Azeri oil and gas resources are not enough for Nabucco, which demands 15 billion cubic meters of gas for a start,” he said. “Under the circumstances, Iran is likely to be invited to the project. Given the U.S. and EU recent optimistic statements, it’s quite possible. Thus, Armenia can become the most convenient and secure route for the transit of Iranian gas to Europe,” Dilanyan said. The expert also reminded that Turkish Foreign Minister Ali Babacan said that Armenia can become an alternative route for Iranian gas transit. “The global crisis has testified that economic benefits come to replace political ones in implementation of regional projects. And Armenia stands a good chance to make use of it,” Dilanyan said.

[KarotheGreat]

Re: Armenia's Economic Pulse

Armenia Keeps Key Tax Exemption for Farmers

Published: Monday February 16, 2009

YEREVAN (RFE/RL)--The vast majority of Armenian farmers will remain exempt from value-added tax (VAT) for agricultural products that was introduced this year in line with the country's commitments to the World Trade Organization (WTO), government officials said on Monday.

The 20 percent tax, until now levied from sales of all non-agricultural goods, has long accounted for most of the Armenian government's' tax revenues. The government pledged to extend it to the agricultural sector when it was admitted to the WTO in February 2003 after a decade of membership talks with its more than 140 member states.

The government assured Armenians living in rural areas at the time that few of them will have to pay VAT in the foreseeable future. The country's rural population largely consists of subsistence farmers struggling to eke out a modest living despite paying only a separate land tax.

In 2006, the government of then President Robert Kocharian announced that VAT will not be paid by farmers whose annual turnover does not exceed 8 million drams when it is introduced in January 2009. The threshold was subsequently raised to 58.4 million drams ($190,000).

According to Armen Alaverdian, deputy head of the State Revenue Committee (SRC), this means that only several hundred of some 340,000 individual farmers and agricultural firms will have their domestic sales taxed. “In essence the agriculture sector, excluding large agribusiness firms, will continue to be taxed in the same way,” he said.

Alaverdian seemed confident that the application of VAT will not push up the prices of domestic agricultural products. “I am convinced that prices won't go up,” he told a joint news conference with Deputy Agriculture Minister Samvel Avetisian.

Avetisian, for his part, said it will be logistically very difficult for Armenian agribusiness firms to split up to lower their turnover and thereby avoid VAT. “I don't think that, say, a large poultry farm, would find it beneficial to divide into smaller entities,” he said.

[KanadaHye]

Re: Armenia's Economic Pulse




Monday, February 23, 2009

Iran-Armenia gas pipeline inaugurated

Armenia officially completed on Monday the construction of a natural gas pipeline from neighboring Iran which could reduce its heavy dependence on Russian energy resources and significantly boost its electricity exports.

It remained unclear, however, when Iranian gas could start flowing into the country.

The pipeline’s second and final Armenian section was inaugurated in the presence of President Serzh Sarkisian and Alexei Miller, chairman of Russia’s Gazprom giant. The two men, joined by other Armenian, Russian and Iranian officials, watched as workers welded together its last pipes.

Miller’s presence at the high-profile ceremony underscored the fact that the pipeline will be controlled by the ArmRosGazprom (ARG) national gas distribution company in which Gazprom holds a controlling stake. ARG has financed and carried out work on the 197-kilometer stretch running through the country’s mountainous Syunik region.

In a speech during the ceremony, Miller welcomed the completion of the “very important project.” He said its implementation testifies to a “high level of political cooperation between Russia and Armenia.”

Former President Robert Kocharian was also in attendance. Kocharian had inaugurated the pipeline’s first, 41-kilometer section together with Iranian President Mahmoud Ahmadinejad in March 2007.

Speaking to the journalists, Energy Minister Armen Movsisian said the pipeline will undergo technical testing and be ready to pump Iranian gas within weeks. But he again avoided setting any dates for the start of Iranian gas supplies.

The new pipeline’s operational capacity of approximately 2.3 billion cubic meters of gas per annum essentially matches the annual volume of Armenian gas imports from Russia that are carried out via Georgia. With Russian supplies meeting Armenia’s needs, the bulk of Iranian gas is expected to be converted into electricity that will then be exported to the Islamic Republic.

As Movsisian pointed out, the pipeline would be vital for Armenia’s energy security in case of “force majeure situations.” The minister clearly referred to a possible disruption or termination of Russian gas deliveries to Georgia that would almost certainly affect Armenia as well.

The prospect of a cut-off in Russian supplies has become even more real since the August war between Georgia and Russia. A senior Georgian official predicted last month that the Russians will at least cut back on those supplies this winter.

(Source: Armenialiberty.org)

[KanadaHye]

Re: Armenia's Economic Pulse

Looks like the pulse is flat lining like the rest of the world...

(Taken from armenialiberty.org)
World Bank Sees Zero Growth In Armenia

The Armenian economy will likely stop growing and could even contract this year because of the deepening impact of the global recession, a senior official from the World Bank said on Wednesday.

“I think at best one could expect flat growth,” said Aristomene Varoudakis, head of the World Bank office in Yerevan. He pointed to official statistics that showed Armenia’s Gross Domestic Product shrinking in the fourth quarter of last year.

The fourth-quarter drop explains why full-year economic growth in Armenia slowed to 6.8 percent in 2008 after six consecutive years of double-digit expansion. The economy is being hit increasingly hard by recent months’ fall in international prices for non-ferrous metals and large-scale cash remittances from Armenians working abroad.

Varoudakis did not exclude that the worsened economic outlook may force the Armenian government to revise its spending and targets for 2008 downwards. “It is very important for the budget to reflect the economic situation so that the government, the National Assembly and the public know what the necessary measures are,” he told journalists.

Meanwhile, the World Bank disbursed late Tuesday $85 million in loans designed to help mitigate the global economic downturn’s impact on Armenia. The largest of these loans, worth $50 million, will be provided to several Armenian commercial banks that will in turn lend the funds to local small and medium-sized businesses in need of credit. Another $25 million will be spent on the construction of rural roads and other infrastructure, which is due to start this spring.

“These projects will support urgent local works that can be implemented largely over this year to provide immediate employment opportunities,” Asad Alam, a World Bank regional director, said in a statement. “They will also help strengthen infrastructure connectivity particularly in rural areas, meet business needs, and upgrade social infrastructure that will foster medium-term growth and improvement in living standards.”

The disbursed loans are part of at least $525 million in total assistance which the World Bank has pledged to provide to Armenia in the next four years. Officials have said that the bank’s commercial lending arms could raise the total to $800 million.