Expert: Armenia has no future because of Nagorno-Karabakh conflict

By Azernews

By Rashid Shirinov

The Armenian economy suffered a dramatic deterioration in 2016 due to rising borrowings and capital outflow. The picture is not pretty for 2017.

The volume of external debt seriously increased, unemployed jumped and migration further intensified, while the foreigners refused to invest in this poor South Caucasian country. Economists believe that the volume of Armenia’s external debt, which currently stands at $5.122 billion, may exceed 50 percent of GDP in 2017.

Ukrainian economist Alexander Okhrimenko, who is the President of the Ukrainian Analytical Center, is sure that the Armenian economy will continue to stand idle because of the unresolved Nagorno-Karabakh conflict.

He noted that the economies of neighboring countries of Armenia and Azerbaijan - the sides to the Nagorno-Karabakh conflict- differ considerably in terms of their potential. Okhrimenko said that the GDP per capita in terms of purchasing power parity in Armenia is by $10,000 less than in Azerbaijan.

Like many experts, he believes that the protracted Nagorno-Karabakh conflict does not give Armenia any opportunity to build normal business relations with its neighbors in the region. “As a result, there is no possibility of economic cooperation.  Armenia's economy is in self-isolation because of this conflict,” the analyst said.

The expert went on to say that the share of industry in Armenia's GDP is decreasing, and other industries are not able to ensure the normal operation of the economy. “Moreover, the trade balance of Armenia is negative; meanwhile, the national debt keeps growing. The national debt of Armenia is one of the highest in the world,” Okhrimenko stressed.

The country also faces a big problem such as migration. The country’s population decreased by 12,100 people, or 0.4 percent, over the past year. Okhrimenko explains this with the fact that Armenia has no prospects. “Given that Armenia has no future, it is clear that many people will try to go abroad, there is logic in this,” the expert said.

He added that labor export is a profitable business for the Armenian authorities because the Armenian emigrants ensure currency inflow into the country.

“Every year Armenia receives about $1 billion transfers, and this is more profitable for the ruling regime than exporting goods from the country, which does not even exceed $150 million,” Okhrimenko said.

The Ukrainian expert also stressed that any military conflict is a dead end for a country. “Wars have never brought economic success and prosperity; therefore, it is difficult to understand the logic of Armenia, that conducts senseless military conflict in Nagorno-Karabakh for more than 25 years,” the analyst said.

The continuing aggression of Armenia against Azerbaijan, its territorial claims to neighboring countries pose serious obstacles to the expansion of regional cooperation. This policy leads to Armenia being locked out of all regional projects.

Azerbaijan has repeatedly announced that as long as Armenia does not put an end to its aggressive policy, its participation in any regional project will be impossible.

Azerbaijan's internationally recognized Nagorno-Karabakh territory became a conflict zone following Armenia's aggression in the early 1990s. As a result of Armenia's armed invasion, 20 percent of Azerbaijan's territory fell under Armenia's occupation and over 1 million people turned into refugees and IDPs.