Dennis Sammut: From the current crisis a better economic order can
emerge

2009-03-08 13:28:00

ArmInfo. The whole world is going through difficult economic times. I
am confidant that from the current crisis a better economic order can
emerge, but whilst the crisis lasts it is painful, Executive Director
of the London Information Network on Conflicts and State-building
(LINKS) told ArmInfo correspondent.

According to him, the three South Caucasus countries are not immune
from the current problems. Indeed they may be more susceptible to them
because of their dependence on outside factors. Armenia, Azerbaijan and
Georgia are recipients of large amount of remittances from their
diasporas abroad. There has been a sharp decline in these remittances
over the last few months. One estimate is that remittances from Russia
to the region have gone down by a quarter.

According to Dennis Sammut, the economy of Azerbaijan is increasingly
dependant on export of energy resources. The fact that the price of oil
is now around 40 USD will impact the Azerbaijani budget negatively.
"However, Azerbaijan has strong reserves and will not have serious
budgetary problems in the short term",- he said. He thinks if the world
economic downturn is short and recovery starts next year than the
region will survive and I am sure that in the meantime international
institutions will assist to ensure that there will not be economic
collapse. However many of the problems of the region are self
inflicted. "The process of economic reform needs to continue. The
region needs also to sort out its politics so that trade can flow
easily between them and with the outside world. This is particularly
the case with Armenia. Armenian are a trading nation. They flourish in
situations where they can trade and do business with the people around
them. Surrounding Armenia with minefields and barbed wire kills the
Armenian entrepreneurial spirit. Armenia therefore also has an interest
in changing the status quo",- the European expert concluded.