AUG. 16 2016 (The Conway Bulletin) — Armenia’s Central Bank cut its key interest rate to 7.25% from 7.5% to help counter falling consumer prices, the lowest rate since 2014. Annualised deflation in Armenia measured 1.3% at the end of July, the Central Bank said, a trend that would continue.
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(News report from Issue No. 293, published on Aug. 29 2016)
AUG. 3 2016 (The Conway Bulletin) — Armenian president Serzh Sargsyan sacked Hrant Yepiskoposyan, first deputy director of the National Security Service, after partly blaming him for a two week stand-off with gunmen linked to an imprisoned opposition leader who had captured a police station in Yerevan.
The standoff ended after the gunmen gave themselves up but not before it had triggered street battles between supporters of Zhirayr Sefilyan, the imprisoned leader of the radical opposition group Founding Parliament and a hero veteran of the war in the 1990s with Azerbaijan over the disputed region of Nagorno-Karabakh.
Dozens of people were arrested during the clashes, the worst in Yerevan for more than eight years.
Three policemen were also killed during the standoff which ended on July 31. Police have said that they were shot dead by the gunmen who captured the police station.
The authorities refused to release Mr Sefilyan, a key demand of the gunmen, but the standoff did trigger a serious constitutional crisis for Mr Sargsyan and has damaged his standing.
Analysts said that the capture of the police station and the support that the hostage-takers appeared to garner from ordinary people showed the level of frustration at Mr Sargsyan and his supporters.
“Many of them were almost certainly taking an opportunity to protest against the status quo, rather than endorsing an act of violence,” analyst Thomas de Waal wrote on the Open Democracy website.
“But even that is an indication of how desperate many mainstream Armenians feel in the face of a political system which they feel has no place for them — and which, due to recent constitutional changes, is likely to see Sargsyan and his team retain their grip on power for many years.”
Since the stand-off ended, Mr Sargsyan has sacked senior security officials. Kevork Kostanyan also resigned as the country’s prosecutor-general.
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(News report from Issue No. 292, published on Aug. 12 2016)
JULY 31 2016 (The Conway Bulletin) — Twenty gunmen who had captured a police station in Yerevan surrendered, ending a standoff that had lasted two weeks and triggered clashes between anti-government protesters and police.
The surrender ends what had become seen as a major test of the current government’s resolve.
Armenia’s National Security Service said in a statement: “The anti- terrorist operation is over. Twenty terrorists have been taken prisoner.”
It is still not clear why the gunmen, who had been calling for the release of the radical opposition leader Zhirayr Sefilyan from prison, had surrendered. Over the weekend they had appeared determined to continue their stand-off despite a deadline passing, briefly taking a doctor prisoner and being accused of shooting dead a policeman. The gunmen have denied that they killed the policeman.
A policeman also died during the initial assault on the police station two weeks ago.
Television footage of the gunmen surrendering showed burley Armenian security forces wearing balaclavas frisking the tired looking gunmen. The gunmen looked thin and drawn. Many were old men.
Shortly before surrendering Varuzhan Avetisyan, the group’s leader, said that the gunmen had fulfilled their mission of inciting popular protests against the government.
“Popular protest will continue. We feel that our victory is close and call on Armenian people to continue the fight,” he was quoted by local media as saying.
Clashes had erupted throughout the week between Armenian police and demonstrators supporting the armed group outside the police station.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 19 2016 (The Conway Bulletin) — Armenia’s Statistics Committee said that trade turnover increased by 2.7% in H1 2016, compared to the same period last year, pushed up by a boost in exports. Exports grew by 16.7% to $815m, while imports decreased by 3.7% to $1.46b. A weak dram has made Armenian goods cheaper for exports.
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(News report from Issue No. 290, published on July 22 2016)
JULY 15 2016 (The Conway Bulletin) — Armenia’s ministry of economy proposed slashing taxation on dividends in the draft of the country’s new tax code, official media reported. Armenia’s parliament approved the new tax code at a first reading on June 15. Artsvik Minasyan, minister of economy, said that scrapping dividend tax will lure more foreign investment to the country.
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(News report from Issue No. 290, published on July 22 2016)
JULY 22 2016 (The Conway Bulletin) — >>Malaise, downturn recession. What exactly going on in Central Asia and the South Caucasus?
>>All countries in the region are either growing slower than last year or, in some cases, their economies are even shrinking. The crisis is regional, although each country has shown its own specific problems.
>>This is the region-wide problem. I can see but what caused it?
>>The US dollar strengthened so much in 2014 that it triggered a sharp drop in oil and commodity prices. This pulled dollars away from Emerging Markets, like our own patch. As commodity prices sank, Russia fell into a crisis that quickly turned into a recession. The depreciation of the rouble cut the value of salaries earned by migrant workers, triggering a slowdown in remittances to Central Asia and the South Caucasus.
>>Okay, but oil prices picked up again since the 13- year low point in January. Isn’t that good for energy exporters in Central Asia and the South Caucasus?
>>Higher oil prices have helped state-owned oil companies to relax their emergency mode, but they’re still too low to justify the region’s most expensive projects. Think of the Kashagan oil project in Kazakhstan’s sector of the Caspian Sea, or the upgrade of Azeri Chirag-Guneshli oil project in Azerbaijan. Plus there are negative signs for transparency over the re-organisation of government companies and structures in the energy sector in Kazakhstan and Turkmenistan.
>>And what about the other commodities, such as gold and aluminium?
>>Gold is a big component of Kyrgyzstan’s GDP as it depends on the performance of the Kumtor gold mine in the east of the country. This year, operational problems and corporate battles have slowed production, which has significantly hit Kyrgyzstan’s growth figures. It now could slip into a recession. Tajikistan, on the other hand posted a promising 6.6% GDP growth in the first half of 2016 and state-owned smelter TALCO increased aluminium production. But these numbers should be read with caution. TALCO also said that it is currently operating at a loss, as its production costs are 25% higher than market prices.
>>Right, so is it all bad?
>>Not necessarily. Dollarisation, as Georgia’s Central Banker said this week, is still a problem across the region and the currencies continue to be weak. But despite some devaluations and depreciations, most of them have kept steady in 2016, which is a sign that governments want to keep their economies stable and will spend their reserves to prop them up.
>>And for companies looking to do business in the region, how bad is it?
>>If in 2015 we saw scores of international companies running away from projects in Central Asia and the South Caucasus, this year we’ve seen promising developments, such as the final investment decision for the expansion of the Tengiz oil- field in Kazakhstan and the signing of the contract for the construction of the Rogun dam in Tajikistan, both multibillion-dollar commitments. French hypermarket Auchan has also opened up its long-awaited store in Dushanbe. Perhaps confidence is returning or at least a sense of “let’s just get on with it”.
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(News report from Issue No. 290, published on July 22 2016)
JULY 20 2016 (The Conway Bulletin) — Iran increased gas supplies to Armenia to make up for a drop in Armenian imports from Russia, imposed by repairs to a pipeline crossing Georgia.
The deal highlights the rivalry between Moscow and Tehran for gas supply contracts to Armenia and, more widely, the South Caucasus.
For one month from July 10, repair work will halt gas flows along the Russia-Georgia-Armenia pipeline, Kazak-Saguramo.
Analysts have said the maintenance work on the pipeline from Russia has given Iran a chance to position itself as a reliable alternative supplier of gas.
Armenia imported 818m cubic metres of gas in the first half of 2016 from Russia, a drop of 7.7% from 2015. This is around five times more than Iran currently exports to Armenia.
Levon Yolyan, Armenia’s minister of energy, was due to visit Iran on July 25, to negotiate the gas supplies.
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(News report from Issue No. 290, published on July 22 2016)
JULY 19 2016 (The Conway Bulletin) — Armenia plans to ban the import of 50 Turkish products into Armenia, officially because they fail to meet new safety standards, a move that could reduce its overall imports from Turkey by up to 20%, Vazgen Safaryan, head of the lobby group Union of Domestic Producers, told local media.
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(News report from Issue No. 290, published on July 22 2016)
JULY 22 2016 (The Conway Bulletin) — Charismatic and enigmatic, Zhirayr Sefilyan, exists on the fringe of Armenia’s fractious political spectrum. He was virtually unknown outside Armenia until an armed group of his supporters captured a police station in southern Yerevan on July 17, killed a police commander and took several people hostage.
Clashes between anti-government protesters and police followed and now Sefilyan is spoken of in foreign ministries from Russia to the United States.
The slim 49-year-old has the air of a radical outsider. A Lebanese- Armenian, Sefilyan was a young army officer during the war that Azerbaijan and Armenia-backed forces fought in the early 1990s for control of the disputed region of Nagorno-Karabakh.
As an infantry commander, Sefilyan played a key role one of the greatest victories for the Armenia-backed rebels when they captured the city of Shusha.
This battle on May 8 1992 is fixed in Armenian lore, as the point when the war for Nagorno-Karabakh turned in their favour.
Until that point they had been on the backfoot.
After taking Shusha, despite being outnumbered and out-gunned, the Armenia-backed rebels scored a number of victories and rolled back the Azerbaijani forces until a UN-brokered ceasefire in 1994 ended the war.
Afterwards, Sefilyan led veteran groups and campaigned for better pensions, housing and rights. An intense man, his political views appeared to harden over the years and he drifted more and more towards the fringe of the political spectrum. His Founding Parliament movement calls for an overhaul of politics, accusing politicians of corruption. It has never taken part in an election and its support is estimated at a few thousand.
At the movement’s core is Sefilyan. He has now been arrested three times — in 2007, 2015 and in June 2016.
In June, police arrested Sefilyan for possessing illegal weapons. This arrest triggered the hostage-taking in Yerevan on July 17 and the subsequent clashes between protesters and police.
So far one policeman has been killed when armed men captured the police station and more than 50 people have been injured in clashes between police and demonstrators.
Sefilyan, the fringe radical, has now taken centre stage in Armenia’s politics.
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(News report from Issue No. 290, published on July 22 2016)
JULY 21 2016 (The Conway Bulletin) — Armenia’s power generation company Hydro Corporation said it will invest 8.9b drams ($4.2) to rebuild its small hydropower station on the Argichi river in the east of the country. The hydropower station was built in 2013 and financed through a loan from Germany’s development bank KfW.
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(News report from Issue No. 290, published on July 22 2016)
