To what extent will the actions in Ukraine affect Armenia?
After March 1, when the Federal Council of Russia approves the access of Russian troops in Ukraine, additional pressure was applied against the ruble. On Monday, the ruble was essentially devaluated and about 10% of Gazprom’s stocks were decreased. The US threatens it’s going to apply sanctions and this is only the beginning.
And if Russia continues its aggression against Ukraine the west will help the Ukrainians to fight a large-scale war. The deputy-dean of the economic department of the state university of Russia Andrey Suzdaltsev finds the current situation in Ukraine quite natural.
When speaking to 168-Zham he mentioned that Ukraine is the transit country for Russia’s gas to Europe and it’s natural that Gazprom was the first company to suffer the consequences. He believes that the ruble will devaluate in the next few days. He said that these are serious issues that will leave a negative effect on Russia’s economy. The analyst believes that the Russian economy is strongly tied with the world economy. The foreign investments make 700 billion USD annually.
There are many companies operating based in foreign capital. “It is hard to tell whether these sanctions will be fully applied and what the final results will be. Now a Russian delegation has left for Russia because Russia is a major important of US poultry. Russia is also providing a serious portion of dairy products to Europe. The application of sanctions against Russia will be a two-point sword for the international community,” mentioned Suzdaltsev.
It is clear what the negative effects of the Russian economy will be on Armenia. However, many Armenian politicians avoided giving concrete answers. In the opinion of the chair of the standing committee of parliament on economic issues Gagik Minasyan mentioned that the situation is unstable and in these conditions it is hard to make any predictions. A week ago there was no chance that this conflict would be discussed in a diplomatic way around a table but now due to Merkel’s initiative Russia and Ukraine might negotiate around the issue. “I think it would be a really ungrateful deed if we made predictions based on changing tendencies. It might still be unrealistic in a few hours.”
“Any regional instability has its negative effects on a neighboring state. Time will show to what extent the developments in Ukraine will affect Armenia politically and economically,” said the chair of the union of producers Arsen Ghazaryan. According to him if sanctions are applied in Russia the situation will escalate even more.”
“At any rate today nobody can guess what type of sanctions will be applied. Let’s not rush and time will show what the results are.” According to an independent exert Hayk Balanyan indeed the economic problems originated in Russia will directly soon affect Armenia because the latter is closely tied with the Russian economy. According to him, the effects will first hit the foreign remittances from Russia because the ruble rate is falling and the people who were receiving rubles from Russia from their families will have to buy less stuff with the same amount of rubles. According to NA Mp Garegin Nushikyan’s predictions the Russian and Ukrainian economic effects will strongly harm Armenia too. “This situation will affect all the sectors.”
Stagnation of the Russian economy will affect our business as well. We will feel the results of these changes in about six months. However, if processes go faster and the situation becomes worse, we will feel that difference sooner. Anyway, I do not expect any good; we are on the threshold of very serious changes.”
According to former MP Vardan Bostanjyan, Ukraine’s both political and economic situation may collapse any time, and its relations with Russia are uncertain. “Armenia receives money transfers not only from Russia but Ukraine as well. We will be also vulnerable to currency exchange rate changes there, as well as there will be decreased trade and incomes. Overall as a result of the processes that are happening in Ukraine our country will suffer losses as well,” said Vardan Bostanjyan.
By Gayane Khachatryan
