Wednesday,
Armenia Set For New IMF Loan
• Emil Danielyan
Armenia - An IMF team headed by Hossein Samiei (C) meets with Armenian Prime
Minister Nikol Pashinian, Yerevan, February 26, 2018.
The International Monetary Fund has all but decided to allocate a fresh $250
million loan to Armenia, praising the Armenian government’s macroeconomic
policies and “ambitious” reform agenda.
An IMF mission reported a “staff-level agreement” on the loan late on Tuesday
at the end of a two-week visit to Yerevan which involved talks with Prime
Minister Nikol Pashinian and other senior Armenian officials.
“The agreement is subject to approval by the IMF Executive Board, which is
expected to consider it in May 2019,” the head of the mission, Hossein Samiei,
said in a statement.
Samiei said that the “precautionary stand-by arrangement” would be disbursed in
several installments over the next three years. It is designed to “support the
new government’s reform plans and strengthen resilience against external
shocks,” he said.
“The new government’s ambitious structural reform agenda appropriately focuses
on fighting corruption, improving the business environment, and developing
human capital and infrastructure,” added the IMF official. “In this regard, key
measures include establishing an anti-corruption agency, strengthening
corporate transparency and governance, and implementing active labor market
policies.”
Pashinian reaffirmed his stated commitment to these reforms when he met with
Samiei earlier on Tuesday. He also stressed the importance of IMF support for
their implementation.
The IMF’s most recent lending program for Armenia, worth roughly $115 million,
was launched in 2014 and completed in 2017. Samiei indicated the fund’s
readiness to provide a fresh loan to the country during a March 2018 visit to
Yerevan. He said he held “productive discussions” with then Prime Minister
Karen Karapetian and members of his cabinet.
That visit came just weeks before the start of Pashinian-led mass protests that
led to the resignation of Armenia’s former government. The new government,
which took office in May, pledged to carry on with its predecessor’s IMF-backed
efforts to improve tax collection and cut the state budget deficit.
In his latest statement, Samiei gave a largely positive assessment of the
macroeconomic situation in Armenia. He cited “robust” economic growth recorded
last year, the government’s rising tax revenues, a falling fiscal deficit, and
low inflation.
“Looking ahead, growth is expected to moderate to about 4.5 percent in 2019,
reflecting a weaker global environment and copper prices, and remain in the 4-5
percent range over the medium term,” he said.
Samiei at the same time called for a further improvement in tax administration,
saying that is critical for offsetting short-term “revenue losses” which he
said will inevitably result from major tax cuts planned by Pashinian’s
government.
Income tax rates in Armenia currently range from 23 percent to 36 percent. The
highest rate is set for individuals earning 2 million drams ($4,100) or more.
A government bill which the Armenian parliament is expected to debate soon
would introduce a flat rate for all individual taxpayers. It would be initially
set at 23 percent and gradually cut to 20 percent. Government officials say
that this will discourage tax evasion and stimulate faster growth in the
country.
Samiei cautioned that the tax cuts could have positive effects on the economy
only in the medium term. “Therefore, it is crucial to implement the envisaged
package of tax policy measures to fully offset these [tax revenue] losses,
while being mindful of the reform’s possible impact on equity,” said the IMF
official.
Iran Warns Against ‘Third-Party Interference’ In Ties With Armenia
IRAN -- Armenian Prime Minister Nikol Pashinian and Iranian President Hassan
Rouhani hold a joint news briefing at the Saadabad Palace in Tehran, February
27, 2019
Iran and Armenia want to deepen their relations and will not allow any “third
country” to undermine them, Iranian President Hassan Rouhani said after meeting
with Armenian Prime Minister Nikol Pashinian in Tehran on Wednesday.
Rouhani said that he and Pashinian reached “good agreements in different areas”
but did not go into details.
“As I said at the meeting with the prime minister, we are pleased with
Armenia’s position on illegal and irrational sanctions against Iran,” he said,
clearly referring to the U.S. sanctions re-imposed by President Donald Trump.
“The two countries are willing to keep moving forward based on their national
resources and not to allow any third state to interfere in our cordial
relations,” he added in a statement to the press cited by Iranian news agencies.
Pashinian did not mention the sanctions at the joint news briefing. But he did
describe Iran as a “friendly country” and reaffirm Armenia’s desire to forge
closer ties with the Islamic Republic.
“The weather in our relations is every good,” declared the Armenian leader, who
was making his first official visit to Tehran.
Iran - Iranian President Hassan Rouhani and Armenian Prime Minister Nikol
Pashinian inspect an Iranian honor guard at a welcoming ceremony in Tehran,
.
U.S. National Security Adviser John Bolton discussed with Pashinian
implications of the U.S. sanctions for Armenian-Iranian ties during a trip to
Yerevan in October. Bolton said Washington will be enforcing them “very
vigorously” and that traffic through the Armenian-Iranian border is therefore
“going to be a significant issue.”
In November, a team of officials from the U.S. state and treasury departments
visited Yerevan to explain the sanctions Armenia’s government and private
sector. Pashinian made clear afterwards that that Yerevan will “deepen not only
economic but also political relations” with Tehran.
With Armenia’s borders with Azerbaijan and Turkey closed due to the
Nagorno-Karabakh conflict, Iran as well as Georgia serve as the sole conduits
for the landlocked country’s trade with the outside world. Armenia also imports
Iranian natural gas and diesel fuel.
Closer commercial ties between the two neighboring states appeared to be a key
focus of Pashinian’s talks with Rouhani. The Iranian president said that his
country is ready to sell more gas to Armenia and also use Armenian territory
for gas supplies to Georgia.
“Armenia is ready to be a transit for Iranian gas,” Pashinian said in this
regard.
Armenia is also willing to boost imports of Iranian gas, Pashinian said, while
cautioning that the two sides have yet to agree on its price. “This is a
crucial issue in terms of the attractiveness of such a deal,” he explained.
Officials in Yerevan have long said that Armenia buys over 80 percent of its
gas from Russia because Russian gas is cheaper than Iranian.
Iran - Iranian President Hassan Rouhani greets Armenian Prime Minister Nikol
Pashinian in Tehran, .
Armenia currently pays for Iranian gas with electricity exported to the Islamic
Republic. This swap arrangement is due to be expanded significantly after the
ongoing construction of a new Armenian-Iranian power transmission line is
completed in 2020 or 2021.
Rouhani and Pashinian reportedly discussed this project on Wednesday. According
to Pashinian’s press office, they also agreed to take “practical steps” towards
finally building a major hydroelectric plant on the Armenian-Iranian border.
In his comments to the press, Pashinian also said he is looking forward to the
implementation of a free-trade agreement between Iran and the Russian-led
Eurasian Economic Union. “This is going to open up new opportunities for
increasing our trade,” he said.
According to official Armenian statistics, Armenia’s trade with Iran soared by
over 40 percent, to almost $364 million, in 2018.
Armenian Villager Gets 20-Year Prison Term In Azerbaijan
AZERBAIJAN - A municipal building is seen at the main square in Ganja,
Azerbaijan, July 12, 2018
A court in Azerbaijan reportedly sentenced a resident of an Armenian border
village to 20 years in prison on Wednesday.
The Azerbaijani military detained the 34-year-old Karen Ghazarian in still
unclear circumstances in July. It claimed to have captured him while thwarting
an Armenian incursion into Azerbaijani territory.
The Armenian Defense Ministry categorically denied the alleged incursion
attempt, insisting that Ghazarian is a civilian resident of Berdavan, a village
in the northern Tavush province located just a few kilometers from the
Azerbaijani border. It said he has a history of mental disease and never served
in the Armenian army because of that.
Reports from Azerbaijan said that that Ghazarian received the lengthy prison
sentence after being convicted of plotting “terrorist attacks” and “sabotage”
in Azerbaijan. According to the Turan news agency, his trial took place in the
city of Gyanja in closed session.
The Armenian government did not immediately react to the verdict. It has
repeatedly demanded Ghazarian’s release.
Another Armenian man, Zaven Karapetian, is also being held captive in
Azerbaijan. Karapetian was detained in June 2014, with Baku similarly claiming
to have thwarted an Armenian incursion. Yerevan dismissed that version of
events, saying that Karapetian is a civilian resident of Vanadzor, an Armenian
city around 130 kilometers from the border section which he crossed for still
unknown reasons.
Three residents of other Tavush villages strayed into Azerbaijan in 2014. Two
of them were branded Armenian “saboteurs” by the authorities in Baku and died
shortly afterwards.
Iran’s Khamenei Wants ‘Strong’ Relations With Armenia
Iran - Supreme Leader Ayatollah Khamenei meets with Armenian Prime Minister
Nikol Pashinian in Tehran, .
Iran’s Supreme Leader Ayatollah Ali Khamenei reportedly urged neighboring
Armenia on Wednesday to strengthen its relationship with his country “contrary
to what the United States desires” to see.
Khamenei blasted the U.S. as he met with Armenia’s visiting Prime Minister
Nikol Pashinian accompanied by Iranian President Hassan Rouhani.
“The U.S. is completely unreliable and always tries to cause sedition,
corruption, conflict and war,” the Mehr news agency quoted him as saying. “They
are against the relations between Iran and Armenia and they act against the
interests of our nations. In response, we need to strengthen our relations and
cooperation.”
“Iran and Armenia have never had any problems with each other,” Khamenei went
on. “According to our Islamic teachings, we feel obliged to behave well toward
our neighboring countries. But U.S. officials such as [National Security
Adviser] John Boltonhave no understanding of such matters or of human
relations.”
Rouhani likewise warned “any third country” against meddling in
Armenian-Iranian relations after holding talks with Pashinian earlier in the
day.
Bolton discussed with Pashinian Armenia’s traditionally cordial relations with
Iran when he visited Yerevan in October. He said Washington will be enforcing
renewed U.S. sanctions against Tehran “very vigorously” and that the
Armenian-Iranian border is therefore “going to be a significant issue.”
Speaking in the Armenian parliament a few days later, Pashinian said he made it
clear to Bolton that his government will maintain Armenia’s “special”
relationship with Iran.
Khamenei singled out the need for closer economic cooperation as he made a case
for “strong, persistent and friendly” ties between Iran and its sole Christian
neighbor. According to Mehr, he called for a “vigorous” implementation of
agreements reached during Pashinian’s first official visit to Tehran.
An Armenian government statement said the powerful Iranian leader also
discussed with Pashinian “various regional issues” and the Nagorno-Karabakh
conflict in particular. It said they agreed that there can only be a peaceful,
negotiated solution to the conflict.
Successive Armenian governments have praised the Islamic Republic for its
“balance” position on the unresolved dispute.
Press Review
“Zhoghovurd” reacts to Defense Minister Davit Tonoyan’s remark that Armenian
army units were involved in and “performed their duties” during the events of
March 2008 in Yerevan. The paper says that the Armenian constitution bars the
military from any involvement in domestic political processes.
“Aravot” comments on controversy caused by private donations that have been
made in recent months to a charity run by Prime Minister Nikol Pashinian’s
wife, Anna Hakobian. Many of those donors are companies belonging to wealthy
individuals who were close to Armenia’s former leadership. Some critics go as
far as to claim that they are thus earning privileged treatment by the current
government. The paper disagrees with such claims. “In the past, part of such
donations was made secretly and in cash, and their amounts and use was
impossible to control,” it says. “Now all that is done transparently.” It
argues that the public can now also see what that money is spent on. “So the
difference is huge,” it says.
The same is true for lavish bonuses that have been paid to senior government
officials, continues “Aravot.” It dismisses claims that the bonuses replaced
bribes, making the same argument. “We know about the bonuses and are therefore
able to discuss their ethical aspects,” it says.
“Zhamanak” reports that Russia’s ruling United Russia Party and Gagik
Tsarukian’s Prosperous Armenia Party (BHK) have signed a memorandum on
cooperation which reaffirms a similar document signed by them in 2009. The
paper notes that the memorandum was signed on Tuesday during a visit to Moscow
by an Armenian parliamentary delegation headed by speaker Ararat Mirzoyan. It
calls this a sort of “signal” issued to Mirzoyan or even Prime Minister Nikol
Pashinian’s My Step alliance.
(Lilit Harutiunian)
Reprinted on ANN/Armenian News with permission from RFE/RL
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