ARMENIA WALLOWS IN ECONOMIC CRISIS

AzerNews Weekly
May 27 2009
Azerbaijan

Armenia is facing a dire economic predicament, with the financial
crisis spreading to all sectors of the country`s economy, the local
Tert.am news website said.

According to the Armenian government, the South Caucasus republic`s
Gross Domestic Product (GDP) is expected to shrink 6 percent in
2009. Given the current predicament, Armenia is looking to Russia for
help, but the latter is apparently in no rush to allocate financial
aid to the country.

Russian Foreign Minister Sergei Lavrov has reiterated that Moscow will
press ahead with the campaign of aiding its allies in the Commonwealth
of Independent States (CIS). However, this remains merely a promise,
as Russia has not yet delivered $500 million in aid it had promised
to Yerevan early this year.

Further, the Armenian central bank says the rate of inflation will
increase in the former Soviet republic in the coming months. Moreover,
bank executives believe that GDP growth will be below projected levels.

Another Armenian media report suggests that the government has had
difficulties in delivering social benefits to citizens. In particular,
the payment of wages, retirement benefits and social allowances is
often being seriously delayed. If the situation persists, paying the
designated funds to citizens will become impossible by mid-2009.

Of note, following the devaluation of the Armenian national currency,
the Dram, the increases in prices for food and other basic goods will
enter a dangerous new stage, admits officials. Considering this,
mounting social tension could turn into a major source of threats
for the incumbent authorities, and a change of power may occur in
Armenia any time, analysts say.

Narek Kerobian, an Armenian expert, said such a dire situation
questions his country`s very existence.

Levon Barkhurdian, the former finance minister, also admitted that
the global crisis has devastated the Armenian economy. "Armenia is
among countries that have been affected by the crisis the most. Our
economy is collapsing," he said.

From: Emil Lazarian | Ararat NewsPress