Yerevan seeks funds for presidential elections

The Armenian authorities have begun informal talks with the Russian government to allocate a large loan to Yerevan ranging from $800 million to $1 billion.

The start of negotiations coincided with the abolition of the meeting of European Union (EU) donor states, which remained dissatisfied with the last parliamentary elections held in Armenia in May this year.

The EU demands from Armenia in 2013 fair presidential elections and says that in return it will raise the issue of allocation of funds from donor countries at about $1.5 billion. In addition, before the presidential elections problems and shortcomings that were made during the parliamentary elections should be eliminated. Another condition is to carry out reforms in the judicial system, strengthen the fight against corruption and, most importantly, increase efforts to implement the basic principles of the OSCE Minsk Group, associated with the settlement of the Karabakh conflict.

Avoiding the fulfillment of all of these conditions, Armenia tries to get before the end of the year from Russia part of the loan on the highest interest, which constantly changes depending on the international market.

Why before the end of the year? Because of the fact that in the present situation in Armenia Serzh Sargsyan is even ready to resign or agree to early elections. The absence of opposition in the country is a favorable condition for the second presidential term of Sargsyan. It is more advantageous to go to early elections in autumn than to hold them in cold February. It is not only about the weather conditions, but also about social problems. Gas purchased currently from Russia increased by $60 and is $240 per one cubic meter. Government because of serious problems and to preserve before presidential elections in 2013 tariffs that exist in the domestic market, has to transfer 10 percent of its shares in the ArmRosGazprom to Russian Gazprom.

Today, Armenia's public debt is 43 per cent of GDP, of which 86 per cent, that is, $4 billion, is foreign debt, and besides, if $1 billion is taken from Russia in debt, the public debt will be higher than 55 percent of GDP. This is an extremely high figure, and a serious problem for the economy.

In addition, the daily devaluation of the national currency of the country continues, and the debts should be settled in foreign currency. So, until the end of 2012 the social situation of the population will worsen significantly, and therefore costs, and in parallel, the debts will grow.

Today it is relatively easy to solve social problems with cheap agricultural and daily consumption products, but a significant increase in prices at the end of the year can lead to tensions in the social situation in the country and struggles.

Therefore, the current political situation can be considered favorable to Serzh Sargsyan, and, probably, he would prefer to hold presidential elections before the appointed time than to wait for worsening social conditions in the country. But only on one condition - if necessary funds are allocated.


Arzu Naghiyev /Trend/