“Iran is planning massive investments into the economies of Georgia and Armenia. We’re talkingof 1 billion dollars for Tbilissi and a analogous offer to Yerevan. For your consideration: the total amount of Russian investments in Georgia in 2006 did not exceed 30 million dollars, as to Armenia, after arrangements made by Vladimir Putin will total to 1,5 billion dollars. In case this plan of capital expansion is put to action Iran may become the most influential actor in the region[i.e. South Caucasus] ” writes Kornelij Glas (ru) following reports about US Concerns by Armenia’s energy ties with Iran.
Elaborating on the situation, whereby a senior American diplomat has voiced concerns, that Armenia’s deepening economic relations with neighboring Iran might run counter to international sanctions imposed on Tehran over its controversial nuclear program Armenia blog comments:
Iran has always been our neighbor and if the U.S. wants greater support for its actions, perhaps it can only be warranted by further aid to Armenia to help offset the natural losses that would occur by turning against our friend. Then again, should a conflict arise in the future, Russia and Iran are Armenia’s two true allies and the United States could not be counted upon, in my opinion, to help matters in our favor.
The world is flat, reiterates Thomas Friedman’s concept Nazarian, looking for Armenia’s place in the Globalized world.
I am still unsure of Armenia’s role and contribution to the global economy. It’s a tiny market. Yerevan is a small city of 1 million people; there are dime a dozen of such cities around the world. Add to that the middle class is a small segment of the population that can afford a lifestyle of a Western citizen, and you see why a foreign corporation may not be interested to have an official presence in Armenia let alone have manufacturing operations.
Notes from Hairenik is even more concerned about Armenia’s economy, despite continuous growth rates recorded here, ensuring annual average real GDP growth rates of more than 10% since the late 90’s, quoting the June 19 edition of ArmeniaLiberty.org about statements by the European Bank for Reconstruciton and Development (EBRD) on continued appreciation of the Armenian national currency (dram) and the dire consequences it will have on the economy sooner or later:
I have concluded, although I do not claim to be an economist by any means, that Armenia’s economy is dollar based and probably always has been. Even though dram is being exchanged on the street people still think in dollars and even quote figures keeping the US currency in mind. In the meantime, money I suppose will keep pouring in from foreign remittances but it won’t circulate here. The continued shortage of dollars on the market is a clear indication that something is dreadfully wrong somewhere. And I would not be surprised if Armenia sees a depression in its “booming” economy in the short-term, God forbid. In fact I am expecting it.
Not all Armenian bloggers are pessimistic however. Levon who has just arrived in Armenia after a couple of years of absence, is deeply impressed upon arrival with rapid changes at the aiport as well as in the center of capital Yerevan.
Narjan has reposted extracts from the Reuters article: “The world leader in natural gas vehicles: tiny Armenia”:
The tiny country of 3 million people in the Caucasus mountains has a strong claim to be a world leader in running vehicles on natural gas: a fuel that produces fewer harmful greenhouse gases than gasoline or diesel.
The transport ministry estimates that between 20 and 30 percent of vehicles in Armenia run on gas. That compares to just over 3 percent in the Netherlands, a front-runner in natural gas-powered transport, according to the World LP Gas Association.
Well, even in a “tiny” country people want to live well, and with all these international pressures on Armenia, when all the big guys, including US, Russia, EU and Iran are too much interested in strengthening their influence in this highly strategic location, all we can do is sit and watch our country being tossed about… or is there something we can actually do?