Tag Archives: Armenia

Armenian economy is broken, says new PM

NOV. 19 2016 (The Conway Bulletin) — Armenia’s economy is virtually broken and needs major reform if it is going to survive, the country’s new PM Karen Karapetyan told Bloomberg in an interview.

Parachuted into the job in September after a series of crises pushed trust and credibility in the previous PM to near breaking point, Mr Karapetyan is the former Gazprom executive and former mayor of Yerevan, who President Serzh Sargsyan has tasked with transforming the Armenian economy.

Corruption and the dominance of a handful of well-connected oligarchs, who control most of the lucrative import businesses, need to be countered, Mr Karapetyan said.

“We’re proposing the most rapid change that’s possible,” he said. “We will create an even, competitive, level- playing field.”

And the ruling Republican party needs to do something fairly radical if it is going to have any chance of holding on to parliament after an election in May. In July this year, hundreds of young Armenians clashed with police in support of a group of gunmen who had captured a police station, highlighting frustration with the government.

In the interview, Mr Karapetyan also said that he wanted to cut government spending to halve the state deficit, a difficult objective if you also need to win votes.

“We also have external debt growing faster than the GDP growth and growing faster than revenues,’’ he said.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

The battle for Armenia’s water services

NOV. 25 2016 (The Conway Bulletin) — Veolia and French rival Saur had been the two major bidders for a contract to unite Armenia’s water supply and sewage systems under one operator.

Prior to Veolia’s victory in the tender, the two companies had been evenly matched.

Veolia operates Yerevan Djur which supplies 1.1m people living in Armenia’s capital with water and waste services.

Since 2014, Saur has operated Armenian WSC, Lori WSC, Shirak WSC and Nor Akunk WSC which supply water and sewage services to 1m people.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

France’s Veolia beats rivals to win $800 contract for Armenia’s water

NOV. 21 2016 (The Conway Bulletin) — French utility company Veolia will become the near-monopoly water distribution and sewage management operator in Armenia, after beating European rivals to the €800m ($845m) contract.

Veolia, one of the biggest water and waste management companies in the world with around 175,000 employees and revenues of over $30b/year, already controls Yerevan Djur, a local utility company that supplies water and sewage services to the capital. Through this entity, Veolia already employs 1,200 workers in Armenia and, under the new 15 year contract, it will become one of the country’s largest employers.

Veolia’s management hailed the tender victory as a major achievement.

It beat French rival Saur, Italy’s Acea and a German-Russian consortium for the contract.

“This success is exemplary: it is the result of a joint effort by Veolia’s teams who have managed to capitalise on the experience and professionalism of the Group’s employees in Yerevan and to apply the best practices developed by a network of experts working in over 40 countries,” Malika Ghendouri, Veolia’s vice president of Central and Eastern Europe, said in a statement.

Armenia doesn’t have natural resources on the scale of its neighbours Azerbaijan or even Georgia, making water management one of the most lucrative sectors for Western companies.

Saur had managed four other major water utility companies in Armenia but will now relinquish control to Veolia at the start of 2017.

Several international financial institutions, among which the EBRD and the European Investment Bank, pledged to support Veolia’s infrastructure work in Armenia, which the company forecast at $200m in the next four years.

One of the reasons that Veolia won the contract was its apparent drive to improve water services across the region. Armenia’s Soviet-era infrastructure needs updating.

Allegations of corruption have marred the privatisation of Armenia’s water utilities since the early 2000s. The World Bank, which masterminded the privatisation, dismissed the allegations in 2007 and 2008.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Armenia to issue second bond

NOV. 18 2016 (The Conway Bulletin) — Armenia plans to issue its second ever eurobond by 2019 or 2020, finance minister Arshaluys Margaryan told Reuters. Mr Margaryan did not specify the size of the eurobond. Armenia issued its first eurobond in 2013. It was dubbed the Kardashian bond, after Armenian- American actress Kim Kardashian, and was valued at $700m.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Armenia to cut energy consumption

NOV. 23 2016 (The Conway Bulletin) — Armenia plans to cut its consumption of gas, electricity and coal by 38% and boost its electricity generation from renewable sources, deputy energy minister Hayk Harutyunyan told local media. The ambitious plan appears to be another attempt by cash-strapped countries in Central Asia and the South Caucasus to cut expensive energy consumption. Azerbaijan and Kazakhstan have both announced plans to cut back on electricity-generation plans. Kyrgyzstan has also hinted it wants to use more green energy.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Armenia demurs for WMD

NOV. 17 2016 (The Conway Bulletin) — Armenia’s parliament voted to extend for seven years a deal with the United States designed to stop the spread of so-called weapons of mass destruction. Under the deal the US supplies Armenia with equipment and training to stop the spread of nuclear, chemical and biological weapons. The original deal was signed in 2000.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Armenia cuts interest rate

NOV. 15 2016 (The Conway Bulletin) — Armenia’s Central Bank cut its key interest rate by 0.25% to 6.5%, its lowest level since at least 201. The Central Bank has been steadily cutting interest rates throughout the year to try to combat falling inflation. At the start of the year, Armenia’s interest rate had been set at 8.75%. The Central Bank said that economic activity was still slow and that it expected soft inflationary pressures to continue.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

EU wants to relax visa, says Armenia

NOV. 14 2016 (The Conway Bulletin) — Armenian media reported that following an EU meeting backing a visa liberalisation deal with Georgia and Ukraine, the EU also wanted to start talks with Armenia on scrapping, or relaxing, its visa system. Specifically, Armenpress said that EU officials were waiting for “an opportunity to start negotiations on visa issues with Armenia in a timely period.”

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Deflation continues in Armenia

NOV. 9 2016 (The Conway Bulletin) — In the first ten months of 2016, consumer prices in Armenia decreased by 3.1%, the country’s Statistics Committee said. Importantly, food prices decreased by 6%. Deflation in the country has continued throughout the year, although October registered inflation of 0.5% compared to September. Low economic activity has depressed prices in Armenia and could hinder growth.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

EBRD gives loan to Armenia

NOV. 9 2016 (The Conway Bulletin) — The EBRD gave a $50m loan to Armenia to modernise a section of the Vanadzor-Bagratashen highway, which connects central Armenia to the border with Georgia. Repair and construction work will be carried out along a 51km section of the road. The European Investment Bank will support the modernisation of another section of the road with a $51m loan. Vanadzor is Armenia’s third-largest city. Armenia-Georgia ties have improved in recent years.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)