Armenia`s CIS ties cut off after Georgia pullout
Georgia`s recent pullout from the Commonwealth of
Independent States (CIS) is another factor making things worse for
the ailing Armenian economy, analysts say.
Georgia finalized its withdrawal from the Russia-dominated former Soviet bloc on August 18. Tbilisi`s move has raised utter concerns in the Armenian political circles. Since Georgia is the only country linking Armenia with Russia and other CIS states, its pullout has essentially caused severing of Yerevan`s trade ties with the Commonwealth member states.
CIS members are enjoying mutual concessions in the areas of customs, cargo transport and commerce. These beneficial relations are vital for the Armenian economy, which is facing a predicament.
Experts predict that Georgia`s CIS withdrawal will lead to the reduction of Armenia`s foreign trade by 57 percent by 2011. Particularly acute will be shortages of food and liquid fuel.
Western analysts believe that Moscow could try to extricate Armenia from the crisis by means of Iran, but these attempts do not appear promising.
Thus, Armenia has only one option left to continue trading with other CIS states - through Azerbaijan. However, the prospect is dim so long as the long-standing Upper (Nagorno) Garabagh conflict between the two countries remains unresolved.
The Armenian economy shrank 18.5% in January-July 2009, according to official estimates. The biggest slump was observed in the construction sector - 55%. The situation is expected to further deteriorate, as the government commands no more resources to inject into the sector to foster a turnaround.
In the background of dropping economic indicators, inflation in rising in Armenia. The country`s statistics body estimated inflationary levels at 3.9% in the first half-year and 21.9% in the past year.
Also, the unemployment rate has increased 11% since early 2009. Independent experts estimate that over 60% of able-bodied citizens have lost their jobs since the world economic recession began, and the number of the jobless is on the rise. In addition, Armenia`s foreign trade turnover dwindled 32% to $1 billion in the first half-year. Exports halved, and imports exceeded the volume of exported goods almost five times. Experts warn the Armenian economy has fallen under heavy dependence of imported commodities. Russian hackers attacked
Georgia finalized its withdrawal from the Russia-dominated former Soviet bloc on August 18. Tbilisi`s move has raised utter concerns in the Armenian political circles. Since Georgia is the only country linking Armenia with Russia and other CIS states, its pullout has essentially caused severing of Yerevan`s trade ties with the Commonwealth member states.
CIS members are enjoying mutual concessions in the areas of customs, cargo transport and commerce. These beneficial relations are vital for the Armenian economy, which is facing a predicament.
Experts predict that Georgia`s CIS withdrawal will lead to the reduction of Armenia`s foreign trade by 57 percent by 2011. Particularly acute will be shortages of food and liquid fuel.
Western analysts believe that Moscow could try to extricate Armenia from the crisis by means of Iran, but these attempts do not appear promising.
Thus, Armenia has only one option left to continue trading with other CIS states - through Azerbaijan. However, the prospect is dim so long as the long-standing Upper (Nagorno) Garabagh conflict between the two countries remains unresolved.
The Armenian economy shrank 18.5% in January-July 2009, according to official estimates. The biggest slump was observed in the construction sector - 55%. The situation is expected to further deteriorate, as the government commands no more resources to inject into the sector to foster a turnaround.
In the background of dropping economic indicators, inflation in rising in Armenia. The country`s statistics body estimated inflationary levels at 3.9% in the first half-year and 21.9% in the past year.
Also, the unemployment rate has increased 11% since early 2009. Independent experts estimate that over 60% of able-bodied citizens have lost their jobs since the world economic recession began, and the number of the jobless is on the rise. In addition, Armenia`s foreign trade turnover dwindled 32% to $1 billion in the first half-year. Exports halved, and imports exceeded the volume of exported goods almost five times. Experts warn the Armenian economy has fallen under heavy dependence of imported commodities. Russian hackers attacked
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