Officials fear Armenia falling under strong Russian influence
Russia will issue a $500 million loan to Armenia,
fast becoming a military buffer for Russia in the South Caucasus
region. The announcement was made by Russian Finance Minister
Alexei Kudrin.
Yerevan earlier sought loans from the Asian Development Bank, EBRD and the Russian government to alleviate its domestic economic crisis. Although the financial institutions refused to allot the credit due to its latest political developments and a lack of economic sustainability in the South Caucasus republic, Moscow has apparently agreed "to finance" Armenia.
Some experts say Armenia may agree to introduce a zone where Russian Rubles are used on its soil in exchange for lending assistance, which would essentially mean establishing Russia`s control over the country`s financial system and the whole economy.
Vardan Ayvazian, who chairs the Armenian parliament`s commission on economic issues, has expressed concern over the threat of his country`s entering "the Ruble zone." He said Russia might demand this from Armenia since the party providing the loan normally dictates its terms.
"The Armenian economy is already completely dependent upon Russia. Therefore we will have to continue receiving loans from the Russians to stay afloat, which could lead to a total withdrawal of the Dram (national currency) from circulation."
Russia has begun providing financial aid to countries that are in its sphere of influence. It has recently granted $2 billion each to Kyrgyzstan and Belarus.
Yerevan earlier sought loans from the Asian Development Bank, EBRD and the Russian government to alleviate its domestic economic crisis. Although the financial institutions refused to allot the credit due to its latest political developments and a lack of economic sustainability in the South Caucasus republic, Moscow has apparently agreed "to finance" Armenia.
Some experts say Armenia may agree to introduce a zone where Russian Rubles are used on its soil in exchange for lending assistance, which would essentially mean establishing Russia`s control over the country`s financial system and the whole economy.
Vardan Ayvazian, who chairs the Armenian parliament`s commission on economic issues, has expressed concern over the threat of his country`s entering "the Ruble zone." He said Russia might demand this from Armenia since the party providing the loan normally dictates its terms.
"The Armenian economy is already completely dependent upon Russia. Therefore we will have to continue receiving loans from the Russians to stay afloat, which could lead to a total withdrawal of the Dram (national currency) from circulation."
Russia has begun providing financial aid to countries that are in its sphere of influence. It has recently granted $2 billion each to Kyrgyzstan and Belarus.
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