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ON THE THRESHOLD OF A NEW CRISIS. The possible impact of sanctions against Russia in 2022 on the Armenian economy

The objective of this research is to assess the effects of new economic sanctions currently being imposed on the Russian Federation on Armenian economy. To reach this objective the effects of sanctions imposed on the Russian economy since 2014 and its transmission into Armenian economy were studied, as well as historical economic losses of both countries associated with these sanctions were estimated through econometric tools. Also the changes in the resilience of Armenian economy and economic dependence from Russian economy since 2014 were revealed.

On the basis of these studies, by applying multivariate econometric models (specifically Structural Vector Autoregression/SVAR/ model) and a general equilibrium model (Global Integrated Monetary and Fiscal/GIMF/ DSGE model), three scenarios were designed to capture the effects of new sanctions (imposed since February 2022) on Armenian economy: the “baseline” scenario (the Russian economy declines by 11% in 2022), the “optimistic” scenario (the Russian economy declines by 7%), and the “pessimistic” scenario (the Russian economy declines by 15%).

The scenarios suggest a range of possible developments in the RA economy, starting from growth deceleration to 1.3% and ending with a 3% economic decline. They also show that the RA economy may lose some of its economic potential in the medium-term: the losses of real GDP would reach an amount estimated from 5% to 12% in 2026 compared to pre-shock forecasts.

Given the huge uncertainties around the developments associated with the shock, possible upside and downside risks, as well as opportunities for Armenian economy were also revealed. Full material is only available in Armenian.

  


A new challenge to the independence of the judiciary: What аre the observations of the Venice Commission and how does the executive proceed?

The Ministry of Justice has initiated another “reform” that puts the independence of the judiciary under further threat. Initially, the Ministry attempted to carry out the “reform” in an easy way, only defining a new incompatibility requirement for judges, which should serve as a ground for immediate termination of the powers of the judge. Meanwhile, after receiving a critical opinion from the Venice Commission, the Ministry was obliged to revise the draft proposal. However, the Ministry of Justice ignored core remarks of the Venice Commission relating to the impermissibility of giving retroactive effect to new grounds of termination of the powers of a judge. As a result, the Ministry created the illusion that the amended draft law is in line with the observations of the Venice Commission, while the reality is entirely different. Full material is only available in Armenian.

  


The social-economic developments in the economy of the RA for January-February 2022

In the present analysis, given the data published by the Statistical Committee of the RA, we study the recent social-economic developments in the economy of the RA. In particular, we consider the cumulative indicator of economic activity of the given month, its sectoral distribution, as well as the dynamics of individual sectors of the economy. We also analyze economic developments in the foreign trade, labour market and fiscal system of the RA. In addition, some aspects of the financial system (inflation, deposits and loans), as well as the behaviour of the exchange rate, are touched upon. Full material is only available in Armenian.

  


Reference on the execution of the budget of the city of Yerevan (2021)

The budget execution report of Yerevan represents the main results – achievements and failures - of activities of the city council in the given period. It shows by how much the actual revenue collection deviates from the planned level. Additionally, the report demonstrates whether the expenditures were made in accordance with the prespecified plan. The budget execution report of Yerevan also characterizes the structure of actual revenues and expenditures. The goal of the present analysis is to study the foregoing report and to make necessary conclusions. Full material is only available in Armenian.

  


“Law on levying the property of illegal origin” and problems of its constitutionality

One of the key measures taken within the frameworks of the anti-corruption strategy of the Government of the Republic of Armenia was the adoption of the “Lawon Levying the Property of Illegal Origin” which provides for mechanism of non-conviction based confiscation of property.

The publication examines various aspects of constitutionality of the law, in particular issues of proportionality of interferences with a number of fundamental rights, including rights to property, the retroactive effect of laws, the right to a fair trial.

The analysis can be useful for experts in the field, advocates, and the legal community in their research and practical work. Full material is only available in Armenian.

  


The social-economic developments in the economy of the RA for January 2022

In the present analysis, given the data published by the Statistical Committee of the RA, we study the recent social-economic developments in the economy of the RA. In particular, we consider the cumulative indicator of economic activity of the given month, its sectoral distribution, as well as the dynamics of individual sectors of the economy. We also analyze economic developments in the foreign trade, labour market and fiscal system of the RA. In addition, some aspects of the financial system (inflation, deposits and loans), as well as the behaviour of the exchange rate, are touched upon. Full material is only available in Armenian.

  


Demographic situation and emigration in Armenia։ a blurry future

Demographic problems are an integral part of the modern world. Armenia has faced demographic problems (low birth rate, emigration, ‘brain drain’, etc.) since independence. After the so-called revolution, the newly formed Government of the Republic of Armenia proclaimed a sharp increase in the population of the country, due to a significant reduction in the rate of emigration and an increase in repatriation, as one of the main factors of development, including economic, of the Republic of Armenia. What we have today? What steps have been taken by the government to achieve the mentioned goals? This study addresses these issues, as well as analyses the impact of demographic problems and emigration on the Armenian economy. The full material is available only in Armenian.

  


The Index of Economic Freedom in the RA (2022)

The study of indicators and indices published by international organizations allows to address two important problems. First, to assess the performance of the RA in the given period with the help of comprehensive numerical measures, as well as to make intertemporal comparisons in order to understand whether the country moves in the desirable direction. Second, to compare the performance of the RA with other countries to ascertain Armenia’s relative position in the region and Eurasian Economic Union. These results are important, since they help to derive the comprehensive assessment of the economic situation, which is needed both for the public and the private sector. The present analysis is aimed at addressing the foregoing problems. Full material is only available in Armenian.

  


Another diplomatic failure of the Armenian authorities: why were some pro-Armenian statements left out of the important documents of the European Parliament?

On February 17, 2022, the European Parliament approved two important documents: the 2021 Annual Reports on “the Implementation of the Common Foreign and Security Policy” and “the Implementation of the Common Security and Defense Policy”. In this article, we tried to compare them with the documents of the same nature approved by the EU in 2020 and highlight their key differences regarding Armenia.

We recorded that although, through the efforts of the opposition and individuals, some pro-Armenian formulations on the settlement of the Nagorno-Karabakh conflict were preserved in the 2021 documents, in general, a number of key statements important for Armenia that were contained in the previous year’s reports were excluded from the new documents. The flirtation of the current Armenian authorities with Ankara and Baku has obviously weakened the critical attitude of the international community, including the EU, towards Turkey and Azerbaijan on Armenian issues. Full material is only available in Armenian.  

  


"Winter Geopolitical Games - 2022" - What does the statement of the leaders of Russia and China on international relations mean?

The most important episode of the opening of the Olympics in Beijing was, of course, not an unprecedented large-scale show specific to China, and not even a diplomatic boycott by the West, but a joint statement on international relations made by the leaders of China and Russia immediately before the opening of the Olympic Games. In the framework of this analysis, we have tried to address the most important messages of the joint statement of Putin and Xi Jinping, to understand what impact it will have on international relations and the policy of small countries.

We have fixed that this joint Russian-Chinese application in the field of international relations can greatly change their logic. A new military-political pole of two superpowers is being formed, each of which, although maintains its independence and peculiarities, but they have a common position on important international issues. This means that in the near future, the confrontation on various international issues between China/Russia on the one hand and the US/NATO on the other will intensify, which in turn will put small states in front of a difficult geopolitical choice. Armenia cannot afford to get involved in the "Beijing Winter Geopolitical Games", but also cannot retain the role of a "toy" in the political games of the superpowers. Full material is only available in Armenian.

 

  


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