In recent years, in the form of private transfers, sums amounting to tens of billions of dollars have come to Armenia from abroad. They came especially from Russia. They served the political agenda of the authorities, but not the development of Armenia’s economy.

The sanctions applied to Russia have become a real salvation for today’s rulers of Armenia. Without it, it is hard to imagine what they would do. The economic growths that have been recorded in the last few years and of which they are so proud, are not due to the developments of the Armenian economy, but mainly due to this. If there were no sanctions, there would be no such economic growth either.

They are not only financial, but also the result of serving huge commodity flows.

In addition to the direct impact on trade movements, they also greatly influenced the economic indicators of Armenia. For example, the role of Russian gold is invaluable for the industry, about which they try to talk as little as possible. However, without Russian gold, not only would there not have been, let’s say, the slight growth of last year, but it would also have been impossible to avoid the decline. The influence of Russian gold on the industry is so great that after 2-3 months of active re-exports of gold, the industry came out of the decline recorded for months and also recorded growth. But that is not development. And you will not go far with such increases. Such increases give almost nothing, both to the economy and to the society.

That is the reason why “revolutionary” increases very often do not add anything to the pocket of an ordinary citizen, instead, they give the authorities an opportunity to create an illusion of developments.

The financial and commodity flows that circulate through Armenia continue to be a lifeline for the authorities. 3-4 years after the start of the Russian-Ukrainian conflict, huge financial resources are coming to Armenia. Another record of private transfers was registered last year. Almost 6 billion dollars came from abroad only through the banking system.

We are talking exclusively about the money sent by citizens, which exceeded last year’s record by 142 million.

But it is not with the difference of 142 million that the whole change of money coming from abroad, which is happening in the last few years, can be seen. Small sums of money did not enter Armenia before. But what we see after the Russian-Ukrainian conflict is incredible. In a short time, the financial flows entering Armenia through private transfers, exclusively through the banking system, have increased almost 3 times.

If in 2021 they were within the framework of 2.1 billion dollars, now they have reached 6 billion.

The main part of that money comes from Russia.

Russian flows continued to remain extremely high last year.

Of the 5 billion 979 million dollars that came to Armenia through banks, 3 billion 878 million are Russian capital. It made up almost 65 percent of the receipts.

In order to make it clear what happened in these few years in terms of transfers from Russia to Armenia, let us record that in 2021 during the whole year, the entry of Russian capital through this pipeline amounted to only 865 million dollars. It increased 4.5 times in four years, reaching 3 billion 878 million dollars.

In total, more than 15.2 billion dollars entered Armenia from Russia in four years. No other country has ever received so much money in Armenia in 4 years. Although most of these amounts were of commercial significance, they had a direct impact on the economy, trade and especially the financial sector. The high growth recorded in the banking system and the huge profits secured are also related to these amounts.

Money comes to Armenia from other countries as well, but they are much less than what comes only from Russia.

As always, the second place is the United States, whose share is around 12 percent.

733 million dollars came from the USA last year, which is 43 million more than the previous year.

During the last 4 years, the money transferred from the United States has also increased, but much less, in the amount of only 153 million.

Recently, there has been a sharp activity in terms of money sent from Great Britain to Armenia through the private transfer channel. In that sense, Great Britain has not been active in relations with Armenia before. However, recently the activity has increased dramatically. For example, last year the inflow of funds from that country almost doubled, reaching 207 million dollars. Just 4 years ago, they were barely around 40-41 million dollars.

They have increased by 5 times in four years. But the activity has increased especially in the last 1-2 years. It is not known what contributed to such activity of British capital flows in Armenia, but they came mainly under the name of trade transfers. Non-commercial ones are only in the order of 22-23 million dollars or 10-11 percent of the transfers made.

In the last 4 years, through private financial transfers, exclusively through the banking system, a total of 22.7 billion dollars entered Armenia, 15.2 billion from Russia. This is a huge amount for a country with a small economy like Armenia. An average annual amount of 5.7 billion dollars came from abroad through private transfers, which is very little inferior to the expenses made in the state budget. Regardless of the purpose for which these funds entered Armenia, how they were circulated, they had a direct impact on economic indicators and especially on the financial sector. Another thing is that very often these effects were not qualitative, because the political power was unable to use these huge resources for the development of the economy and the increase of economic capacities.

HAKOB KOCHARYAN

—