Armenia's Economic Pulse

[Federate]

Re: Armenia's Economic Pulse

But if Russian state presence in our energy sector declines, how will the "Russia owns all our energy infrastructure" classic talking point to blame all our problems on survive?


Russian State Presence in Armenian Energy Sector Declining


Russia’s economic grip over Armenia may be loosening ever so slightly, highlighted by Moscow’s diminishing role in the South Caucasus country’s power sector.

Russian gained control over Armenian power plants and the national gas distribution network as a result of controversial assets-for-debt agreements with the Armenian government in 2003-2006. These days, state-run Russian corporations supply the bulk of natural gas consumed by Armenians. Russian companies likewise own many of Armenia’s key energy assets, providing the Kremlin with lots of economic leverage over a country that it considers its closest ally in the Caucasus.

But Russia’s commanding economic presence now seems to be on the wane. One of the Kremlin-controlled energy giants, Inter RAO, essentially pulled out of Armenia late last year, selling the country’s debt-ridden electricity distribution network and largest thermal-power plant to the Tashir Group, a collection of companies run by Armenian-born businessman Samvel Karapetian. Power plants controlled by the Russian state now account for only up to a quarter of Armenian electricity production, according to a calculation based on National Statistical Service data.

Last year also saw the sale of Armenia’s largest hydroelectric complex to an American entity, the New York-based ContourGlobal. The $250-million deal marked the largest single private investment coming from the United States in Armenia’s history.

The planned construction of a major hydroelectric station on the Arax River between Armenia and Iran should further diversify the power sector. The recent lifting of international sanctions against Iran is expected to speed up the repeatedly delayed implementation of the estimated $300-million project.

In recent months, the Armenian government has also reported preliminary agreements with European investors interested in building two new thermal-power plants in Armenia. The World Bank cautioned in a June 2015 report that the country will need an additional 250 megawatts of gas-fired power by 2020 to avoid an electricity shortage.

Analysts caution that these developments alone will not significantly reduce Armenia’s dependence on Russia for energy. “Ownership of the power plants, be it Russian or American, doesn’t matter that much,” said Artur Kochnakian, a senior energy economist at the World Bank office in Yerevan. “It has no direct connection with energy security.”

Kochnakian noted that Russia continues to deliver more than 80 percent of the natural gas used by Armenia and is the sole supplier of fuel to the Metsamor nuclear plant, which produces more than one-third of the country’s electricity. Russia’s Gazprom monopoly also owns the country’s gas distribution network.

In coming years, though, Yerevan plans to more than triple the presently modest volume of gas imports from Iran.

Armenia has been paying for Iranian gas with electricity generated at a thermal-power plant located in Yerevan. Its power supplies to the Islamic Republic should rise sharply following the construction of a third electricity transmission line connecting the two neighboring countries. Work on that line began last year and is due to end in 2018.

A similar new high-voltage facility will also connect Armenia to Georgia. The $115-million project, slated for completion by 2018, is mainly financed by Germany and the European Union. It will allow Armenia to increase its imports of cheap electricity from Georgian hydroelectric stations during the spring and summer, Armenian Deputy Energy Minister Areg Galstian said on April 13. That would presumably make Armenia less reliant on the more expensive supplies from domestic power plants using Russian gas.

The government has decided to shift to May 2017 a routine shutdown at the Metsamor nuclear power station so that Georgian hydroelectricity, at peak strength in spring and summer, can be imported. Using Russian gas to supply thermal-power plants would be more expensive.

While Russia may have growing competition in Armenia’s energy sector, Moscow appears determined to remain a big energy player in the Caucasus energy equation. Galstian spoke to journalists after the energy ministers of Armenia, Iran and Russia and a Georgian deputy energy minister tentatively agreed to increase significantly electricity supplies among their countries. They signed a “roadmap” for the creation of a “North-South energy corridor” by 2019.

As economic analyst Ashot Khurshudian cautioned, diversification of ownership in the energy sector “is certainly reducing some of our energy-related risks,” but the impact of that diversification should not be overestimated.

In particular, Armenian utility regulators have for years put Gazprom and Russian nuclear fuel suppliers “in a privileged position,” said Khurshudian, who works at the International Center for Human Development (ICHD), a private think-tank in Yerevan. “They always get payments for supplies on time, unlike generation and distribution companies,” he claimed.

One of those supposed companies, a thermal-power plant located in the central Armenian town of Hrazdan, is owned by Gazprom. Hrazdan is also home to another, bigger and much older, plant that belonged to Inter RAO until September 2015. The Russian company sold it, along with the Electricity Networks of Armenia (ENA) national power utility, to Russian-Armenian billionaire Karapetian’s Tashir Group.

Born and raised in Armenia, Karapetian since the early 1990s has lived in Russia, where he made a fortune valued by Forbes magazine at over $4 billion. The tycoon has always had closer ties with the Armenian government than the Kremlin. His brother, Karen, is a former chief of staff for President Serzh Sargsyan, and a parliamentary deputy for Sargsyan’s Republican Party of Armenia.

Building profitable businesses appears to be Samvel Karapetian’s main interest. Shortly after acquiring ENA, Karapetian pledged to crack down on “corrupt employees,” modernize facilities and make the distribution network profitable. Meeting with visiting executives from Moody’s credit ratings agency in February, then-Armenian energy minister Yervand Zakharian claimed that the new ENA management had already cut the company’s massive losses. This has contributed to the overall energy sector’s “financial stability,” an Energy Ministry statement quoted Zakharian as saying.

The ICHD’s Khurshudian also believes that ENA has benefited from the change in ownership. “The sale of the Inter RAO assets was definitely a positive development because private firms tend to be more efficient than state-owned ones,” he said.

Regulators have announced plans to reduce power prices within the next month; a decision facilitated, at least in part, by a reduction in ENA’s losses. The only other Armenian power-generating facility currently owned by a state-run Russian company is the Sevan-Hrazdan Cascade, a complex of seven hydroelectric plants. Russian media reported in November that the owner, RusHydro, is now prepared to sell it.

http://www.eurasianet.org/node/78661

[Joseph]

Re: Armenia's Economic Pulse

http://emerging-europe.com/regions/armenia/armenia-yerevan-offer-safe-investment-and-tourism-to-a-growing-world/

[Haykakan]

Re: Armenia's Economic Pulse

Microsoft to prepare large number of specialists in Armenia

ECONOMY 18:22 04/05/2016

“Technology has completely changed our lives. Today we have a more
comfortable life filled IT solutions due to the 4th revolution,” said
managing director of Microsoft’s public sector business in Central and
Eastern Europe, Trudy Norris-Grey during “The 4th industrial
revolution, a path towards effective and innovative management”
conference held in Yerevan.

“For example, large IT companies, including that of in Armenia, which
don’t own vehicles, warehouses, stores, etc., yet they operate in
those areas. Everything is built on skills,” she said.
Trudy Norris-Grey told the reporters that she is proud of all the
achievements Microsoft could provide in Armenia.

“We have launched more than 200 startups, managed to educate more than
2500 students in the IT sphere, invested 1.5 million USD in different
educational programs. I think this is just the beginning,” she added.
According to Trudy Norris-Grey, Armenia is one of four countries in
the world where Microsoft has created an innovative centre. She also
said that they have undertaken the initiative to continue cooperation
with Armenia to prepare a large number of specialists who will be able
to demonstrate their skills not only in Armenia but also in the whole
world.

Concerning Microsoft’s new suggestions towards business development,
Trudy Norris-Grey said that new projects are planned in Armenia.

“I’m sure, if we try to combine the skills and entrepreneurial spirit
in Armenia, we will succeed,” she concluded.

https://urldefense.proofpoint.com/v2/url?u=http-3A__www.panorama.am_en_news_2016_05_04_Microsoft-2DArmenia_1573946&d=DQIFaQ&c=clK7kQUTWtAVEOVIgvi0NU5BOUHhpN0H8p7CSfnc_gI&r=LVw5zH6C4LHpVQcGEdVcrQ&m=g7JqeJWIOYKT-lF5Io0txsWiFXI0Lh5yx2TiTOJqwD8&s=SMeesqlYpVaqSNIeM7Ujl8kNRftscSr_y4lpBGMuWuE&e=

[Joseph]

Re: Armenia's Economic Pulse

http://www.rferl.org/content/armenia-economy-it-sector-booming/27713201.html

Armenia Looks To IT To Lift Economy

By Karine Simonyan and Charles Recknagel
May 03, 2016

Long after classes finish in the village of Aygek, the lights in one room of the school building burn late into the evening.

Inside, 25 students are tapping on keyboards and assembling simple robots. It is a strange sight in this village close to Yerevan where children usually grow up to become farmers or shopkeepers like their parents.

Don't these kids feel out of step with their peers?

"My friends sometimes say that I spend too little time with them because I spend a lot of time in front of my computer," says Vazgen Hovhannisian, who is 16 and busy creating a new computer game. "But now all of my friends play the games I've programmed."

The village computer club is part of a quiet revolution going on in Armenia that could dramatically change the country's economic fortunes in the future.

Largely agricultural Armenia suffers from double-digit unemployment and nearly one-third of the population lives below the poverty line. But a burgeoning IT sector is giving hope that this landlocked land in the heart of the Caucasus could play a significant role in the global computer industry and one day grow prosperous through virtual commerce.

While Armenia's overall economic growth rate was 3 percent in 2015, the IT sector has grown at an average rate of about 22 percent annually since 2008. Today, the IT sector employs some 15,000 people.

That makes it an eye-popping success story in a country which, apart from mineral resources, has few products to export internationally. Armenia's economic situation is further constrained by a continuing trade embargo imposed by two of its neighbors, Turkey and Azerbaijan, over the disputed territory of Nagorno-Karabakh.

The Soviet Union's 'Silicon Valley'

Industry association leaders say they hope that by promoting IT the country can revive days past when, long before the Internet, Armenia was one of the computer powerhouses of the Soviet Union.

"Before 1990, Armenia designed and produced one-third of all the Soviet Union's military electronics, with something like 100,000 people working in this area," says Karen Vardanian, head of the Union of Information Technology Enterprises in Yerevan.

During the Soviet era, the now-defunct Yerevan Research Institute of Mathematical Machines alone had about 10,000 employees as late as in the 1980s. But the collapse of Armenia's economy that followed the breakup of Soviet Union in 1991 dealt a heavy blow to the country's high-tech sector as well as to funding for mathematics and science education in its universities.

"While other countries like India and Taiwan became IT powerhouses, Armenia -- once considered the Soviet Union's Silicon Valley -- languished," Vardanian notes.

Over the past decade, however, IT has made a rapid comeback.Of nearly 500 IT firms operating in Armenia today, almost half have opened since 2007.

The growth has come as diaspora Armenians in the U.S. and European IT industries have reached back to Armenia as a lower-cost source of skilled labor. A computer professional in Armenia can make $1,500 a month, five times the Armenian average wage, but still a fraction of the average monthly amount of $4,300 earned by an entry-level programmer in the United States.

Local Startups

The early foreign pioneers have been followed by others, including in recent years some of the biggest names in the global software development industry such as Oracle and Taiwan's D-Link Corporation, both of which have opened offices in Yerevan.

But the country has also seen a boom in homegrown IT businesses. One of them, PicsArt, has become one of the world's most popular mobile photo-editing and sharing applications. It was listed by Forbes in 2015 as one of the world's 50 "hottest startups."

Recognizing the potential, the Armenian government has fostered the sector's growth with tax breaks, including offering tax incentives to startups that employ up to 30 people. The government is also considering giving computer professionals a special 10 percent income-tax rate, compared to the usual 15 percent rate.

But success has come at an ironic price. Armenia's IT industry today is at the point where its need for trained professionals has grown faster than the country's supply of qualified people.

Industry experts estimate the sector needs some 2,000 more IT graduates than are available, something that gives people like Samvel Shoukourian, who heads Yerevan State University's IT Educational and Research Center, good reason for headaches.

"Armenia needs to create a pipeline to produce this set of very qualified information technology specialists because for the moment we have a lack of specialists and every new company that comes to Armenia is interested in a huge number of specialists," he says.

The shortcomings in the educational system have given rise to a growing network of technology centers for "training up" today's computer graduates. There are nine centers in Yerevan providing additional training for IT professionals and a government-backed "technopark" serving the same purpose in Armenia's second-largest city, Gyumri.

But it is not just today's computer graduates who are getting attention. The IT industry is also busy encouraging the next generation to get into the field.

In the village of Aygek, computer teacher Shusan Grigorian hopes that IT will offer her students a possibility to find work without having to go abroad.

"IT is an area where it does not matter in which corner of the world you are located, because if you are connected to the Internet, it means you’re in the center of the world," she says.

[Joseph]

Re: Armenia's Economic Pulse

The Solar Dryers Created by Armenian Inventors Can Give a New Impetus
to the Development of Agriculture

Inventors anticipate support from the relevant bodies

28-04-2016 21:22:25 | Armenia | Science and Technology

“New farmer dryers, which work with the help of bio-energy and solar
energy, and which “snatch more energy” from sun, will give an
opportunity to develop the agriculture in Armenia and will enable the
export of dried fruits and vegetables. “, - assure the authors of
innovative multifunctional devices, the candidates of technical
sciences Gurgen Martirosyan and Stepan Khoyetsyan.

They presented the results of the production tests of solar dryers,
during the discussion of the “Inventors Club” organized by the
foundation "Noyan Tapan" , which is known for its support to the
development of innovative technologies and prospective solutions.
According to S. Khoyetsyan in Armenia there is no concerned approach
towards solar energy using, although it is one of unique opportunities
to ensure maximum profit in agriculture and in many other fields.
"The solar energy, in terms of perspective, has a serious demand in
the world today: if we want to operate our factories, then we will
face to the problems due to lack of sufficient energetic resources,
while Armenia is one of few sunny countries and can effectively
benefit from it, "he said.
According to the inventor, their modest equipment farmer can use for
drying any type of product, it does not require additional expenses,
it’s enough only to install the dryer to the specific location and it
will be able to dry any product all year round.
Co-author of the invention Gurgen Martirosyan said, that the device
itself is a space, and in it’s floor there are placed Obsidian stones,
which are more heat, the surface is covered with polyethylene and is
attached on wheels in order to move in the direction of the sun's
rays: “This is a dehydrator device, which dries food with the help of
solar energy and each food replaced in it become dehydrated and
dried.” ,- he said, adding that as a result of their experiments, they
gained natural food, which is significantly different from the food
gained from other drying technologies. The device in addition to fruit
and vegetable drying, may also give forage fertilizer, and even grow
seedling. S. Khoyetsyan explained that solar dryers can also be
cultivate grape , core, peel, which are an excellent forage. "With
this, we have fed the animals and got wonderful results." S.
Khoyetsyan explained that solar dryers can also be cultivate grape
core, peel, which are excellent forage. "With this, we have fed the
animals and got wonderful results."
"We have about 30 kinds of product sample manufactured by this device,
which are very important for agricultural development. Today in
Armenian Republic there are approximately 200 thousand not used
hectares of land, this problem can be solved with organic fertilizer,
which we can get with the help of solar dryers. The fertilizer will
nourish the soil and that will provide qualitative increase of product
and also will give an opportunity for grass flour growing, which
generally is not done now.” said Khoyetsyan.
The speaker insisted that the equipment is not that expensive, it
costs about $ 1,000, but without state assistance it will be difficult
to convince farmers to purchase it, as the inventor’s work on the
device should be paid, in order to make products and so after seeing
it farmer would want to purchase it.
According to the inventors, they have repeatedly appealed to the
Ministry of Agriculture, which annually allocates funds for the
creation of new technologies. "We applied to the program, but no reply
has been received so far."
Also they emphasize that the degree of such apathy is caused by clash
of interests of the relevant bodies, as if their devices spread widely
and begin to meet farmers' needs, it will affect fertilizer importers.

https://urldefense.proofpoint.com/v2/url?u=https-3A__youtu.be_SWqZtwpuFPI&d=DQIFaQ&c=clK7kQUTWtAVEOVIgvi0NU5BOUHhpN0H8p7CSfnc_gI&r=LVw5zH6C4LHpVQcGEdVcrQ&m=iVm08RIAwG6zHHwCUeEzSKaEcclLwJPivVtb3P7StBg&s=TEM5RR0WGPfTIvIx4scGsKnfEiQpS9MezonNz8Yv0dY&e=

- See more at:

https://urldefense.proofpoint.com/v2/url?u=http-3A__www.nt.am_en_news_218061_-23sthash.H6FT0b4G.dpuf&d=DQIFaQ&c=clK7kQUTWtAVEOVIgvi0NU5BOUHhpN0H8p7CSfnc_gI&r=LVw5zH6C4LHpVQcGEdVcrQ&m=iVm08RIAwG6zHHwCUeEzSKaEcclLwJPivVtb3P7StBg&s=TFX3CgTC56QUrbxk1UYaQCqM2dUBVQCaAodDN8P545k&e=

[HyeSocialist]

Re: Armenia's Economic Pulse

[QUOTE=Haykakan;372111]

A few years back Armenian scientists showed their potential to build solar cells in Armenia with domestic resources. A $5bln NPP deal is of no use for us. A $1bln sollar deal could pretty much revolutionize Armenia.[/QUOTE

I am not against solar energy but even if you covered the whole country with solar panels you still would not generate the amount of power that one modern NPP can generate. The newer plants are safer, efficient , and more effective. This will allow us to preserve our water resources more and will produce more energy then we need thus we can become a energy exporter. I am in no way against developing solar energy industry but you have to be realistic about how much you can get out of solar vs nuclear vs coal vs gas vs...

I agree, the price of the power plant is insanely high. I figured we could build solar, wind, and geothermal plants to get Armenia completely off of importing goods even uranium and technology. We could also manage how we spend energy more efficiently. This along with massive recycling plans. The whole idea is to get our landlocked country out of dependence of its neighbors as much as possible.

[Haykakan]

Re: Armenia's Economic Pulse

[QUOTE=HyeSocialist;372026]A few years back Armenian scientists showed their potential to build solar cells in Armenia with domestic resources. A $5bln NPP deal is of no use for us. A $1bln sollar deal could pretty much revolutionize Armenia.[/QUOTE

I am not against solar energy but even if you covered the whole country with solar panels you still would not generate the amount of power that one modern NPP can generate. The newer plants are safer, efficient , and more effective. This will allow us to preserve our water resources more and will produce more energy then we need thus we can become a energy exporter. I am in no way against developing solar energy industry but you have to be realistic about how much you can get out of solar vs nuclear vs coal vs gas vs...

[Zeytun]

Re: Armenia's Economic Pulse

Vanadzor Technology Center will very soon open its doors:

https://www.facebook.com/VanadzorTec...enter/?fref=ts



#VTC #EIF #VTCfacilities
Վանաձորի տեխնոլոգիական կենտրոնը շատ շուտով կբացի իր դռները:
Վանաձորում տեխնոլոգիական կենտրոն կառուցելու նախաձեռնությունը Ձեռնարկությունների ինկուբատոր հիմնադրամինն է։
Vanadozr Technology Center will very soon open its doors.
Enterprise Incubator Foundation (EIF) is the initiator of constructing a Technology Center in Vanadzor.

[Zeytun]

Re: Armenia's Economic Pulse

Armenian Rail Operator Accused Of Fraud

http://www.azatutyun.am/content/article/27707353.html?utm_source=dlvr.it&utm_medium=twitter

Karine Simonian
Հրապարակված է՝ 29.04.2016

Anti-trust regulators accused on Friday a Russian-owned company running Armenia’s railway network of inflating capital investments which it claims to have made in line with a management contract signed with the Armenian government in 2007.
Artak Shaboyan, the chairman of the State Commission on the Protection of Economic Competition (SCPEC), based the allegation on a six-month inquiry conducted by the SCPEC.

The commission began investigating the network called the South Caucasus Railway (SCR) after rejecting as unjustified a fresh rise in its cargo shipment tariffs. According to Shaboyan, it found that the company owned by Russia’s state railway, RZD, has for years portrayed current expenditure on its day-to-day needs as investments.
“Those expenditures cannot be deemed investments,” Shaboyan told RFE/RL’s Armenian service (Azatutyun.am). “That means the company has been inflating the amount of its investments.”

The 2007 agreement committed RZD to investing $230 million in Armenia during the first five years of operations and another $240 million in the following years. RZD claims to have invested only $250 million so far. Its Armenian subsidiary cited 9 billion drams ($19 million) in unexpected losses when it raised tariffs late last year.

Shaboyan claimed that those losses resulted, large measure, from mismanagement, inefficiency and possible fraud. In particular, he said, the SCR has rarely held tenders for the purchase of equipment and services used by it.

“Even when the company holds tenders, very often they are mere formalities,” he said. “We have detected cases where companies offering higher prices won its tenders.”

“We have already discussed this issue with our Russian [anti-trust] colleagues and they have expressed readiness to intervene in this matter,” added Shaboyan. “They have organized meetings with senior executives of RZD.”

The SCR spokesman, Vartan Aloyan, dismissed the allegations, saying that RZD has never voiced discontent with the operations of its Armenian subsidiary. He also questioned the SCPEC’s decision to raise the matter with relevant authorities in Russia.

“If there is a law that allows a foreign agency to inspect an Armenian company, let it do that,” Aloyan told RFE/RL’s Armenian service (Azatutyun.am). “We have nothing to hide.”

Another example of a corrupt Russian state company controlling our assets.

[Artashes]

Re: Armenia's Economic Pulse

That plant is about 50th in urgency on the list of things our country needs to address. Armenia's soviet apartment buildings that house hundreds of thousands in Yerevan alone were in theory designed for a 6.0 earthquake (on the US scale). They thought the seismic risk of the region was much lower before the Spitak earthquake. In reality, they were built for about a 5.0-5.5 considering the corruption and all.

It would take something much larger than that to threaten that plant. So if it was a ever a question of that plant failing, tens if not hundreds of thousands will already be dead. I would love to worry about that plant if Armenia was Sweden. Unfortunately that's not the case, and we have much bigger issues

I had the opportunity to talk with (???) a person from UN nuclear (???) that goes to Armenia often in connection with inspection of NPP in Hayastan. This person had a clear Israeli accent and appeared well educated and spoke as such.
Remembering his name or UN agency he represented was not important to me, but the info I got was.
Conversation about Hayastan came to be after I informed him I was an Armenian diaspora.
Bottom line ... Loves the food and injoys his time in Armenia. And his words to me about NPP were all positive insofar as saftey of plant. All his inspections showed plant to be safe to operate.