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 Copyright (c) 2019 Radio Free Europe / Radio Liberty, Inc. 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org