Ex-minister: Europe won't sacrifice its welfare for Armenia's sake

Vardan Aramyan, an expert in the field of public finance management and former Armenian Finance Minister granted an interview for Armenian media, Caliber.Az reports.

"Unfortunately, our economy is growing based on goods not intended for export, and this is the biggest problem. When the Russian-Ukrainian war is over, I think Armenia's economy will face serious difficulties," he said.

"The fact is that political trends do affect economic policy. In response to your question, I will emphasise that the political vector cannot but have economic consequences. We have to be careful. I don't want to talk about who is in power but rather discuss what the economic consequences might be. I agree with the point of view of many economists: after we take action, we have to think about the results. I am not trying to scare, but simply encourage us to assess what the consequences might be and what numbers would help manage the risks.

In terms of our relationship with Russia, we have several links to consider. In terms of gas supplies, it should be noted that we can buy gas from Iran. However, the capacity of gas pipelines from Iran to Armenia is not as high as in the case of Russia. The question arises: what is the alternative option? Here it is also important to consider the road accessibility in terms of cost, as we need to transport some of the gas by tankers in liquid form, given the lack of access to the sea. For example, the distance from Vienna to Munich is about 330-350 kilometres and we can cover this distance in 3 hours. Whereas from Yerevan to Georgia, where the distance is much shorter, about 265 km, we drive 5 hours due to bad roads, mountain passes and bottlenecks. I am a bit sceptical when they say that we have an alternative. This is in terms of supply and pipeline capacity.

Another aspect is the price. Today we buy gas from Russia at $165, and everyone knows that this is not the market price, but the cost price. Do we have more favourable agreements with Iran? In my opinion, Iran sells gas to Türkiye at higher prices. Is Iran ready to supply gas to Armenia at a lower price? If Russia intends to raise gas prices, different scenarios may arise depending on the price set.

As for the opening of transport routes, the biggest problem here is that I cannot understand what the government wants. Moreover, I have listened to the speeches of many European analysts, and they do not have a clear idea of what Armenia wants and where it is going. This complicates the situation. At some point Armenia may negotiate amicably with Russia, then change direction to Europe, then move on to Iran and possibly Türkiye and Azerbaijan. The lack of a clearly defined political course creates uncertainty, and I cannot understand all of this. The benefit to us of opening up transport routes depends on what we, as a state, want. And I can confidently say that the Europeans are not sure either that the Armenian authorities will not return to Russia. That is why they are not in a hurry to help Armenia, as, for example, in 2008, when they supported Georgia.

It is good that we will buy weapons from Europe. But we should not forget that Europeans will never sacrifice their welfare for the sake of Armenia's interests. Let's be honest and not dream. They will continue to buy gas from Azerbaijan, and whatever we do, we must weigh the consequences for security and economy," the expert said.