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2014, year of troubles for Armenia

29 December 2014 14:44 (UTC+04:00)
2014, year of troubles for Armenia

By Mushvig Mehdiyev

Armenians will remember 2014 as a year full of problems in terms of the politics and economy.

First of all, their hope to save the sinking economy was dashed despite the changes made in the cabinet ministers lineup.

Armenia's crippled economy marked the year end with the currency market in turmoil as the dram lost ground to the influential international currencies. Meanwhile, the country went through an overwhelming price hikes in 2014.

In October, the International Monetary Fund (IMF) reduced Armenia’s economic growth forecast from 4.3 to 2.6 explaining it with the unresolved economic challenges facing the country.

In early December, the Armenian National Assembly voted 71 to 46 to sanction the 2015 state budget. All parliamentary factions except the ruling Republican Party of Armenia voted against the bill.

The budget was based on this assumption that the average exchange rate of the dram will stand at 413 drams per one dollar in 2015. But, the government has become red in the face as its calculations fizzled when a dollar bought 440-460 drams by the end of the year.

Armenia's national currency started to sharply devaluate against the dollar in December, while the greenback climbed the top at the exchange offices throughout the country.

Some Armenian retailers took advantage of the dramatic currency exchange rate fluctuations to raise the prices of basic foodstuffs and other essentials, which has led to deeper social concerns and even panic among citizens. Just within a week, the prices of some goods increased by 40 percent in Armenia's domestic markets.

Meanwhile, Armenia has slipped by six points to 85th place among 144 countries in the Global Competitiveness Report 2014, which proved the year-on-year recession in the post Soviet country's economic life.

The mandatory funded pension law was one of the most controversial issues to spark public protests in Armenia in 2014. On January 1, Armenia introduced a mandatory rule of the funded pension system to demand the Armenian citizens born after 1974, to transfer five percent of their wages into special savings funds and another five percent into the government's cashbox.

The residents and civil activists flocked to the streets to protest against the new pension reform, saying it was an unconstitutional decision.

Official ratification of the EEU integration revealed by President Serzh Sargsyan's surprise decision on September 3, 2013, to make a U-turn preferring the Russia-led Eurasian Economic Union (EEU) to the European Union, was likely the most controversial event in Armenia over 2014.

Despite numerous criticisms and negative predictions from the experts maintaining that the EEU is not an alliance fitting Armenia's needs, the president, constitutional court and parliament have consecutively ratified the agreement to be an official EEU member-state on January 1, 2015.

The government forces and thousands of protesters once more confronted each other on August 1, when the Public Services Regulatory State Commission ignored public protests to raise electricity tariffs by 10 percent.

The presentation of the long-awaited tablet of Armenia was a milestone in early 2014. Nonetheless, the reported poverty and unemployment rate (32 percent and 19 percent respectively, according to the statistics service) revealed that the country needs to feed its people instead of making advance technological progress.

Armenia has once again demonstrated its aggressive stance on the Nagorno-Karabakh conflict's resolution despite meetings of Presidents Serzh Sargsyan and Ilham Aliyev on September 4 and October 27.

Although the results of the meetings sparked a glimpse of positive progress in the settlement of the conflict, the Armenian army provoked tensions on the frontline with its illegal helicopter intrusion into Azerbaijan's airspace.

The combat MI-24 helicopter belonging to the Armenian armed forces was shot down by the Azerbaijani troops while conducting provocative flights over Azerbaijan's occupied territories on November 12.

Armenian aggression revealed itself also in the cultural sphere in 2014 by involving in attempts to put pressure on UNESCO to include Lavash in its intangible heritage list as a typical example of the Armenian cuisine. But, UNESCO ruled out the falsified appeal by Armenia acknowledging Lavash as the common heritage of the regional countries following Azerbaijan's appeal.

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