Azernews.Az

By Sara Rajabova

Armenia is tackling with numerous economic problems that have accumulated and been ignored by the corrupt Yerevan government over the years.

The economic problems became more acute in recent times, even spurring protests in the country from time to time. The government, however, is unable to overcome its economic challenges, despite the financial support of international financial institutions and foreign governments, and especially the Armenian diaspora.

The primary reason for the miserable situation in the country is the Armenian government’s aggressive policy that it has pursued in the region over the last two decades.

With its policy of aggression, this impoverished country has sidelined itself from the ongoing major projects in the region. As a result of its continued occupation of Azerbaijan’s internationally-recognized territories and its baseless genocide claims against Turkey, this landlocked country has put itself into the economic isolation.

Several experts believe that the only solution to the numerous problems in Armenia is the resolution of the Armenian-Azerbaijani Nagorno-Karabakh conflict.

Alexander Karavaev, the deputy Director General of the Information and Analytical Center at Moscow State University believes that only progress in the Karabakh issue can save Armenia from economic challenges.

He noted in an interview with the Day.Az website that the economic problems, particularly the crisis in the power sector, are the only a fragment of the complex challenges tied to the geopolitics and foreign policy of Armenia.

Karavaev added that other fields of the economy are also experiencing a similar situation.

“For example, a manufacturer of foil ‘Rusal-Armenal’ is also suffering losses: revenue over the last year decreased by 20 percent, while the volume of loans on the balance sheet increased. Or the ‘Nairit’ company, producing chloroprene rubber, has been idle since April 2010.CIS Interstate Bank in 2006 opened for the owners of ‘Nairit’a credit line of 70 million dollars, which the company did not close. Now, the CIS Interstate through the Moscow Arbitration Court requires 90 percent of the shares for debt,” the expert said.

He considered that the solution to Armenia’s economic problems could be an increase in the inflow of foreign currency by expanding the supply of Armenian products abroad.

Karavaev, however, said this is only possible with a combination of two factors. “If there would be effective structures and mechanisms of the EAEC for the promotion Armenian exports, and if there will be progress in the Karabakh issue so that the restrictions on trade with Turkey and Azerbaijan would be removed,” the expert said.

Armenia occupied over 20 percent of Azerbaijan's internationally recognized territory, including Nagorno-Karabakh and seven adjacent regions, after laying territorial claims against its South Caucasus neighbor that caused a brutal war in the early 1990s. Long-standing efforts by U.S, Russian, and French mediators have been largely fruitless so far.

As a result of the military aggression of Armenia, over 20,000 Azerbaijanis were killed, 4,866 are reported missing, almost 100,000 were injured, and 50,000 were left disabled.

The UN Security Council has passed four resolutions on the Armenian withdrawal from Azerbaijani territory, but they have not been enforced to this day.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

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