Battle of loans: Russia-West fight for Armenia enters economic spher

Battle of loans: Russia-West fight for Armenia enters economic sphere

ECONOMY | 12.12.12 | 13:31


PM Tigran Sargsyan at the ArmTech 2012 high-tech development forum, December 11
ArmeniaNow correspondent

The Executive Board of the International Monetary Fund (IMF) on
Tuesday approved the next tranche of the loan for Armenia amounting to
$51.4 million, thus bringing the total amount of credit released to
Armenia to $324.4 million. The three-year $408.7 million project for
Armenia was approved in 2010.

Through its representative in Yerevan the IMF, in fact, endorsed the
policy of the Government of Armenia, noting only that there are still
problems, especially related to venture business and attraction of
investments in the country. He also hinted at the fact that officials
in Armenia still take bribes from businessmen.

Foreign investments in Armenia this year have fallen by 35 percent,
only the Canadian and Swiss capitals have increased their share.
However, these capitals have been invested exclusively in the mining
sector, and it provided grounds for concerns among Armenian experts,
who argue that the West has intentions to turn Armenia into a country
for raw material supply.

The United States apparently wants to offset this trend by stimulating
high-tech sectors. At Stanford University in California within the
framework of the ArmTech 2012 congress attended by Prime Minister
Tigran Sargsyan, the Armenian government and the Intel Company signed
a memorandum on establishing a research center in Armenia. A
memorandum on the establishment of a plant in Armenia producing
integrated circuits was signed with the Corparacion America company.
U.S. Ambassador to Armenia John Heffern welcomed the participants of
the Congress and said that the U.S. Department of Commerce, using a
range of data of UNESCO, has published a study according to which
Armenia is a leader among post-Soviet countries by the number of
applications for patents for different inventions. The ambassador
expressed hope that these inventions will find good use in
humanitarian and commercial organizations.

Russia apparently has decided to `retaliate’ to the West’s offensive
with a `credit counter-attack’. The Eurasian Development Bank (EDB) is
due to consider a loan of $100 million for the North-South transport
corridor in Armenia. This was announced in Yerevan on December 11 by
EDP Board Chairman Igor Finogenov. `We are considering the possibility
of funding one of the components of the corridor together with the
Asian Development Bank,’ he explained.

The EDB has also received a preliminary application for funding
exceeding $100 million for the modernization of Armenia’s chemical
giant, Nairit. It is not excluded that Russia will provide these sums.

Armenia is likely to accept both `rival’ credits, as its government
needs money to cover the growing external debt and prevent a social
rebellion in the country. Judging by the reduction of investments
during this year, the government prefers borrowing and preventing
foreign capital from entering Armenia. In this sense the flow of
investments from the United States may change the situation in the