MARCH 29 2016 (The Conway Bulletin) – Armenian PM Hovik Abrahamyan said that Russia will reduce gas prices and that a final decision will be taken when PM Dmitri Medvedev visits Yerevan next week. The Armenian newspaper Haykakan Zhamanak reported that the discount could be 12%. The Hrapak newspaper also reported that the pricing could be switched to roubles.
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(News report from Issue No. 274, published on April 1 2016)
MARCH 22 2016 (The Conway Bulletin) – International ratings agency Moody’s downgraded Armenia’s government bonds to B1 from Ba3, as the economic crisis continues to bite. Moody’s said Armenia continues to be vulnerable to external factors, such as “declining remittances from Russia that have not yet bottomed out,” the agency said in a press statement. Moody’s also said the downgrade is linked to the worsening debt/GDP ratio.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 23 2016 (The Conway Bulletin) – A joint report from the UN’s World Food Programme and Armenia’s Statistics Committee said that around 19% of Armenian children under the age of five are stunted, a consequence of widespread malnourishment in the country. The report also noted that around 15% of the surveyed pool is overweight. This is commonly known as a “double malnutrition burden” which can become a public health concern if it spreads across the population. The report concluded that the Armenian government needs to take action to invert this negative trend.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 21 2016 (The Conway Bulletin) – The Armenian government wants to reform its stock exchange to include currencies and other forms of financial trade. In an interview with Reuters, the director of NASDAQ OMX, Konstantin Saroyan, said: “We are concerned that there are no currency operations on the stock exchange and we are trying to change our business model.” Mr Saroyan also said demand for US dollars has declined due to the economic downturn.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 22 2016 (The Conway Bulletin) – Armenia’s electricity production grew by almost 9% in February compared to the same period last year, pushed up again by the proliferation of small hydropower stations. For the first two months of 2016, electricity generation grew by 7% to 1.3b kWh. The Metsamor nuclear power plant accounted for 42% of the total power generation in the country. Power generation has become big business in the South Caucasus, with countries trying to meet a jump in demand.
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(News report from Issue No. 273, published on March 25 2016)
MARCH 16 2016 (The Conway Bulletin) – Armenian PM Hovik Abrahamyan hinted that a final decision on the long-running negotiations with Russia over gas prices would be made when Russian PM Dmitri Medvedev visits Yerevan next month. Armenia imports all its gas from Russia, one of its most important allies, and has asked for a cut in price to help it cope with an economic downturn. Russia has agreed a cut but not as drastic as Armenia had wanted.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 14 2016 (The Conway Bulletin) – Orange Armenia, one of the players in the country’s telecoms market, is preparing to rebrand to adjust its identity to Ucom, the fibre optic cable company that bought it last September. Ucom’s green colours will soon replace Orange’s trademark tone. France’s Orange previously owned Orange Armenia.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 17 2016 (The Conway Bulletin) – Armenian President Serzh Sargsyan travelled to Athens for a high-profile meeting with Greek PM Alexis Tsipras where both sides pledged to increase bilateral support and trade. Greece is, potentially, a natural ally for Armenia in Europe. Both countries have strong Christian roots and are both able to grumble about past grievances with their larger shared neighbour, Turkey.
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(News report from Issue No. 272, published on March 18 2016)
MARCH 18 2016 (The Conway Bulletin) -The economic downturn continues to hit Central Asia and the South Caucasus with British Airways now cancelling its London-Baku service.
But whether BA needs to quit the route altogether is questionable. Airlines keep a diversified portfolio of route because it is near impossible to second guess which routes will be profitable in a few year’s time.
The decision took many by surprise because of the strong presence of British business in Azerbaijan, most notably BP.
As oil prices fell dramatically in the past 20 months, airline companies have rallied on cheap fuel, but have also struggled to maintain links to countries negatively affected by the crisis.
In 2012, British Airways cut its route to Yerevan, the following year it cancelled regular flights to Bishkek and Tbilisi. Last October, the company quit its London-Almaty route.
The crisis, aside from hitting government budgets and people’s wallets, has contributed to cutting off further the region from the West.
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Editorial from Issue No. 272, published on March 18 2016)
MARCH 15 2016 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD), one of the biggest investors in the former Soviet region, signed a deal with Armenia’s Central Bank to help it develop dram-listed capital markets, to improve Armenia’s image as a reliable financial market.
The agreement is part of EBRD’s Local Currency Programme (LCP), which is also aimed at Georgia, Kyrgyzstan and Tajikistan.
“The EBRD provides local currency loans through procuring local currency funding or hedging, by entering into currency swaps with third party providers, such as the Currency Exchange Fund,” the EBRD said in a statement.
It’s been one of the EBRD’s stated aims to develop markets and financial tools which support local tools and reduce the dollarisation of economies.
“Expanding the availability of local currency financing is crucial for the growth of local businesses by providing them with fund at affordable rates and manageable risk,” Andre Kuusvek, EBRD director at the LCP said in a statement.
Strengthening and protecting local currencies has become especially important after the drop in oil prices globally exposed their vulnerabilities.
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(News report from Issue No. 272, published on March 18 2016)
