Via Bekaisa, news of another Armenian blog, but this time on a specialist theme — the economy. Personally, I’d like to see more specialists blogging from all walks of life in Armenia more often so I’m glad to see what looks an interesting and unique blog like this emerge.

The Armenian Economist is a new blog dedicated to the dissemination of the views of economists and professionals on current developments in the economy of Armenia. The goal is to fill a void in the community related to the timely discussion and exchange of views on events affecting the Armenian nation.

Topics of interest may include fiscal and monetary policy, government regulation and governance, trade, labor markets, banking, income distribution, health care, education, among many others. We look forward to a healthy exchange of views and ideas, with civility in a nonpolitical setting. Assistance in contributing and expanding the scope of the blog is greatly appreciated.

I’ve had a quick glance through and it’s interesting indeed, focusing on issues and topics such as energy and telecommunications in Armenia as well as paradoxical growth in some sectors of the economy that should benefit most of the population, but in fact don’t.

The Armenian Economist is here.

Eurasianet has yet another insightful analysis on the situation in Armenia by RFE/RL’s Emil Danielyan. This time the focus is on the energy sector and Armenia’s dependence on Russia. However, there’s a twist. The article doesn’t deal with the import of power from abroad, but rather the way in which Yerevan appears happy in handing over the Republic’s local energy resources to Moscow.

After more than a year of negotiations, Russia has completed the acquisition of Armenia’s power distribution network, tightening its grip on the Armenian energy sector. The Armenian government says the $73-million takeover will breathe new life into the Electricity Networks of Armenia (ENA). But government critics have denounced it as a further blow to the country’s energy security.

[…]

Critics, however, claim that Armenia’s energy dependence on Russia has reached a critical level, posing a serious threat to the Caucasus state’s sovereignty. According to Eduard Aghajanov, an economist critical of the government, ENA’s sale all but completed the country’s “energy colonization” by Moscow. “It is inadmissible to give everything to one state, especially in the area of energy,” he told EurasiaNet. “Russia is now in a position to impose its will on us in both the economic and political spheres at any moment. We are tying a noose around our neck.”

After the fiasco of handing over a 15 year monopoly on telecommunications to ArmenTel that set Armenia years behind Georgia and Azerbaijan especially in the area of the Internet and mobile telephony, I fear Aghajanov is right. The full article is here.

Associated Press has a story on fears that Russia’s blockade of Georgia will affect its land-locked southern neighbour, Armenia. The danger for Armenia was evident as soon as the crisis started, but now more and more media outlets are looking at this associated issue.

Arkady Sarkisian has made his living by shipping containers full of ripe peaches and fish to Russia.

But after Moscow severed all transportation links this past week with Georgia, the main transit country for Armenian goods, Sarkisian has had to pay more to transport his containers by a less direct route.

Armenia’s prime minister, whose country is a close ally of Russia, insists that so far the Caucasus nation hasn’t suffered any financial losses. Sarkisian, though, angrily disagrees.

“And what about me?” he said. “What about dozens like me?”

[…]

Politicians and analysts warn that Russia’s transport and postal blockade may end up economically isolating Armenia, Georgia’s landlocked southern neighbor.

[…]

Russia is the main trading partner for Armenia, where the average monthly salary is equivalent to $90.

Most of Armenia’s goods travel to Russia via Georgia since neighboring Turkey and Azerbaijan have closed their borders in protest of the conflict over Nagorno-Karabakh, an ethnic Armenian territory inside Azerbaijan, which the two countries dispute.

[…]

And the dispute could deal another blow to Armenia if Moscow cuts its natural gas supplies to Georgia, effectively blocking supplies to Armenia. Several Russian politicians already have raised that prospect.

The full story is here.

As an energy crisis looms in the South Caucasus this winter, the BBC reports that the Tbilisi Mayor’s Office has cut off gas supplies to the Russian Embassy in the Georgian capital. Blasts that disrupted supplies of gas to Georgia have been blamed on Russia by the Georgian President Mikheil Saakashvili who accuses Moscow of attempting to “punish” his pro-western government.

The mayor of the capital, Tbilisi, said it was more urgent to heat homes than buildings used by those taking part in an “energy blockade” on Georgia.

Many Georgians have been without gas or electricity after blasts wrecked a pipeline from Russia.

[…]

The crisis comes during the coldest winter for decades, with temperatures of -20C.

Obviously, the move was not taken so well by the Russian government who issued a statement condeming the decision. According to Civil.ge the Russian Foreign Ministry accused Tbilisi of taking “one more anti-Russian action.” Meanwhile, Armenia has not yet been affected as adversely as its northern neighbor. However, RFE/RL reported yesterday that the country’s gas distributor remained unconvinced by Russian pledges to repair the pipeline this weekend.

Sardarian said on Friday that ARG has yet to decide whether to limit supplies to business consumers such as factories and liquefied gas filling stations. “It depends on the situation on the ground,” she said, underscoring the persisting uncertainty. “If repair work is completed and gas supplies resume by the promised date, there will hopefully be no [supply] limitations. If the situation changes, we will have to look at a timetable for limitations.”

Myrthe posted some concerns about the disruption of gas to Armenia last Sunday on Life as I see it, but on a brighter note, China’s Xinhuanet reports that gas supplies to Georgia and Armenia resumed this morning. I’d expect that the major Armenian news agencies will confirm this tomorrow. Update: Mosnews confirms that gas supplies to Georgia and Armenia have now been resumed.

RFE/RL reports that recent heavy snowfall threatens to plunge Armenia into another energy crisis. With temperatures set to drop to -13°C this weekend, an increased gasification of apartments in Yerevan would have spared many families the ridiculously high cost of heating their homes with electricity were it not for two explosions that have disrupted supplies of gas to Armenia through Georgia.

At the same time, the Yerevan Municipality has failed to cope with the snowfall, and RFE/RL reports that the situation is even worse in other areas of the country. Flights arriving and departing from Yerevan’s Zvartnots airport have also been affected and some reportedly cancelled.

Snow has fallen on the country in record amounts for almost a week, piling up to between 80 and 110 centimeters in some of its mountainous regions. It stood at 55 centimeters in the Armenian capital, according to the national meteorological service. “This is above the height of snow registered in Yerevan in the past 100 years,” its director, Albert Torosian, told RFE/RL on Thursday.

City authorities have faced a barrage of media criticism for their failure to effectively deal with the emergency. Many streets in Yerevan remain covered in snow and few snow ploughs have been seen at work so far. The municipality has urged motorists to avoid driving during night hours. There are also regular reports of snow blocking mountain passes and other sections of major roads outside the capital.

No doubt the scenes from inside and outside the capital are very pretty, but the disruption of gas supplies now appears to be taking on a political dimension.

The freezing weather could have hardly come at a worse time. Armenia and neighboring Georgia have been facing their worst energy crises in years since last Sunday’s explosions in southern Russia that knocked out the pipeline shipping natural gas to the two South Caucasus nations.

[…]

The Russian prosecutor’s office had said on Wednesday that the two explosions were a terrorist attack carried out by Islamist militants operating across the Russian North Caucasus. However, Georgia’s President Mikhail Saakashvili alleges that Moscow itself organized the sabotage to punish his pro-Western administration. Russian officials have strongly denied the charges.

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RFE/RL reports that teachers in Yerevan’s secondary schools have been given the task of promoting imminent constitutional amendments among pupils and their parents.

Onik Vatian, who heads the Yerevan municipality’s education department, confirmed reports that relevant “explanatory work” has already begun in some schools. It also emerged that Mayor Yervand Zakharian will hold a special meeting on the issue with hundreds of schoolteachers on Tuesday.

[…]

Vatian added that he has already discussed the issue with schoolteachers but denied pressuring them to vote for Kocharian’s package of amendments at the November 27 referendum and to urge others to follow their example. He said some of them told him that they will vote against the amendments.

Vatian also denied that the Yerevan municipality is enlisting teachers for the pre-referendum “Yes” campaign on orders from the central government and the Education Ministry in particular.

The Armenian authorities have long used school staffs for ensuring desired outcomes of national elections. For example, Justice Minister David Harutiunian, himself a former schoolteacher, personally campaigned for Kocharian’s reelection in 2003, visiting schools in Yerevan and urging their personnel to vote for the incumbent.

In addition, many Armenian schools also serve as venues for polling stations. It is therefore not uncommon for teachers to sit on precinct-level election commissions. Some of those commissions were even headed by school principals during the 2003 presidential ballot. They were reportedly under pressure to ensure the incumbent’s victory at any cost or risk losing their jobs.

Meanwhile, RFE/RL also says schoolchildren in Yerevan will enjoy longer holidays this winter because the municipal authorities are unable to heat their classrooms.

According to Armenian Education Ministry regulations, the minimum temperature in classrooms during the winter period must be 20 degrees Celsius. However, authorities have long failed to meet that requirement due to the low efficiency of electrical heaters that serve as the main source of heating in most municipal schools. The problem was particularly acute during last, harsher-than-usual winter, with many schoolchildren catching cold and skipping classes.

[…]

The authorities have declared the restoration of central heating in public schools a top priority. But only 43 of some 200 schools in Yerevan have their own boiler-houses that allow for proper heating at present.

In another story that is kind of related to fuel, RFE/RL reports that Yerevan’s airport is experiencing a shortage of kerosene. As a result, airlines have switched to using smaller aircraft carrying less passengers or extending the length of flights in order to re-fuel in other countries.

“The airport itself doesn’t import fuel,” a Zvartnots spokesman, Gevorg Abrahamian, told RFE/RL over the weekend. “There is a supplier who is supposed to meet our needs. The fuel has been hard to come by or not available at all since August. Our demand is simply not being met.”

According to Abrahamian, each plane taking off from Zvartnots is now given one metric ton of fuel, instead of the required 13-14 tons. The airport has already run out of its fuel reserves, the official said.

Zvartnots’s exclusive kerosene supplier is the Mika Limited company that specializes in fuel imports and has a de facto monopoly on trade in aviation kerosene. Mika officials have declined to comment on the situation despite repeated inquiries from RFE/RL. One of them said they can not comment because the company’s owner and chief executive, Mikhail Baghdasarov, is “too busy.” A Russian citizen, Baghdasarov is believed to be close to Defense Minister Serzh Sarkisian.

Talking of A1 Plus, although now officially on holiday, they’ve just posted a statement from USAID on the suspected transfer in ownership of Armenia’s energy distribution company which I blogged about on Tuesday.

The United States Agency for International Development (USAID) is concerned by reports that a transfer of the beneficial (or economic) ownership of Armenia’s energy distribution company (Electric Networks of Armenia, or ENA) from its currently licensed owner (Midland Resources Holding) may have taken place. If these reports are correct, this transfer occurred without following important Armenian government regulations which exist to protect Armenian consumers. As we wait for this situation to be clarified, USAID is reviewing its assistance portfolio to determine whether the success of some of its ongoing or planned projects would be undermined by any revised ENA ownership arrangement, or by a lack of due process in changing that ownership arrangement.

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The Mediamax Agency reported this morning that the U.S. Government’s Agency for International Development (USAID) is reviewing its assistance portfolio in Armenia following reports about the sale of the country’s energy distribution network to a subsidiary of a Russian company. RFE/RL also follows the story.

“If these reports are correct, this transfer occurred without following important Armenian government regulations which exist to protect Armenian consumers,” the U.S. government’s Agency for International Development (USAID) said in a statement. “As we wait for this situation to be clarified, USAID is reviewing its assistance portfolio to determine whether the success of some of its ongoing or planned projects would be undermined by any revised ENA ownership arrangement, or by a lack of due process in changing that ownership arrangement.”

Incidentally, this news follows harsh criticism from the World Bank on reports of transfer of ownership.

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