YEREVAN (RFE/RL)–Armenia’s economic ties with Russia have so far been largely unaffected by the global economic crisis, a Russian official said on Thursday, reporting a nearly 20 percent increase in bilateral trade registered in the first ten months of this year.
According to government statistics cited by Aleksandr Zaytsev, Russia’s trade representative to Armenia, the volume of that trade totaled about $860 million during this period. Armenian and Russian officials repeatedly said earlier that it will pass the $1 billion mark in 2008.
Russia thus remains Armenia’s number one trading partner, accounting for almost 20 percent of its external trade turnover in January-October 2008.
Zaytsev also announced that Russian investmen’s in the Armenian economy nearly doubled to $570 million in January-September 2008. The bulk of those investmen’s were apparently channeled into Armenia’s energy and telecommunication sectors dominated by large Russian companies.
“The financial and economic crisis has not seriously affected [Russian-Armenian commercial ties,]” Zaytsev told a news conference in Yerevan. “It will certainly somehow affect them later on.”
Russia has seen its stock markets collapse since the outbreak of the crisis in September and the resulting sharp drop in international oil prices, a key Russian export.
The downturn’s impact on the Armenian economy has been far milder so far. Still, economists fear that the economy will be hit hard by a possible reduction in large-scale cash remittances sent home by hundreds of thousands of Armenia’s working abroad. Russia is the main source of those remittances.
Economic issues were reportedly high on the agenda of Russian President Dmitry Medvedev’s October visit to Yerevan.
“Our current economic relations are impressive but tend to lag behind our political relations,” Medvedev’s Armenian counterpart, Serzh Sarkisian said after the talks, calling for the launch of “large-scale joint projects.” Sarkisian said he and Medvedev discussed potential Russian involvement in two such projects: the planned construction of a new Armenian nuclear plant and a railway linking Armenia to neighboring Iran.
Armenia’s rail network, recently renamed the South Caucasus Railway (SCR), is managed by Russia’s state- run rail company, RZD. The Armenian authorities have signaled their discontent with SCR’s Russian management of late.
A series of reports in the Armenian press accused the Russia’s of failing to honor their investment commitmen’s. They also alleged that the SCR’s chief executive, Aleksandr Kuznetsov, has misappropriated company funds.
Zaytsev categorically denied the allegations. He said RZD has invested $108 million in Armenia’since taking over its rail network’s management in January.
Under the terms of its management contract with the Armenian government, RZD is to invest $230 million in the network during the first five years of operations and another $240 million in the following years.
Zaytsev also criticized Armenia’s State Commission for the Protection of Economic Competition (SCPEC) for fining the SCR 500,000 drams ($1,600) on Wednesday for its failure to provide the regulatory body with a detailed explanation of its tariff policy.
The SPCEC demanded the information last month in connection with its ongoing inquiry into the legality of a recent sharp increase in the cost of cargo shipmen’s and other services provided by the railway.
The anti-trust inquiry was demanded by one of Armenia’s largest fuel importers owned by government-connected businessmen.