Why Pashinyan kicked out Russian Armenian businessmen

RT editor-in-chief Margarita Simonyan’s appeal to the Armenian authorities continues to agitate Yerevan and Moscow experts. Some observers believe that the collapse of the Armenian-Russian relations will threaten ’s independence and the Armenian people’s future. In the article “Armenia’s open society: Where Russophobes come from” Vestnik Kavkaza has already examined Simonyan’s thesis that the Armenian authorities have turned the country into a staging ground for anti-Russian forces in the , flooding it with anti-Russian NGOs. Here we will try to understand how true is the following accusation: “You kicked out Russian Armenian businessmen. You don’t want anything to do with Russia”.

More than a billion dollars are transferred to Armenia annually from Russia, they say that this money remains the main source of income for the population. But until recently, there was another process as well – Russian businessmen, mostly of Armenian origin of course, worked in Armenia. Why of course? First, people implementing projects here are often guided by patriotic considerations rather than by big profits. Second, local business customs are very specific. In the spring of 2018, the online magazine about offshore companies ‘Off the Coast’ published the article ‘Business in Armenia for Russians – Tips on starting or buying a business’: “If you decide to start your own business in Armenia, you will have to prepare for the enormous difficulties associated with the mentality of local residents. Each employee here will try to do everything to take at least something home, even if he does not need it. Therefore, the first tip is full control over work performance. “

On the positive side, the magazine pointed to “a single principle of taxation and equality between residents and non-residents.” However, the disagreements between the Armenian authorities and Russian business in the country began in the tax sphere – claims were made against a subsidiary of Russian Railways; Gazprom Armenia was accused of tax evasion.

After Nikol Pashinyan came to power, the Armenian State Revenue Committee announced tax violations at several gas filling companies, including the subsidiary of Gazprom Armenia, Avtogaz; South Caucasus Railway was accused of tax violations. Then the experts described the tax authorities’ actions as an attack on Russian business as part of the Russian gas pricing.

It is fair to say that bargaining is appropriate in interstate economic relations, but, as a rule, the contracting parties try not to wash dirty linen in public. In the case of Armenia, many were embarrassed that the authorities acted demonstratively.

The new leadership of Armenia announced the closure of the Center for Strategic Initiatives, created by the founder of Troika Dialog Investment Company, philanthropist Ruben Vardanyan. In March last year, the Armenian media attacked Vardanyan, accusing him of creating a network of several dozen offshore companies through which money was withdrawn from Russia, including with the use of “criminal schemes.” According to an investigation dubbed the Troika Laundromat, the network operated from 2006 to 2013, in total $9 billion was laundered and withdrawn from Russia. Vardanyan, who invested hundreds of millions of dollars in the Armenian economy, asked “not to mix round and green”, but nevertheless ended up in disgrace with the Armenian authorities. Meanwhile, several years ago, Vardanyan was called one of the largest investors in Nagorno-Karabakh occupied by Armenia. In 2014, the director of the Center for Political Innovation and Technology, political scientist Mubariz Ahmedoglu said: “Now almost all the Armenians of Nagorno-Karabakh are hostages of the local branch of Ameriabank. All of Vardanyan’s activities in Nagorno-Karabakh serve to transform this region into a theatrical stage for scenery. Information about Vardanyan’s income is not available. It is only known that Vardanyan’s economic activity in Nagorno-Karabakh was not favourable to a rapprochement between Armenians with Russia.

The story of the owner of the Tashir Group conglomerate, Russian billionaire of Armenian origin Samvel Karapetyan looks just as confusing. Three years ago, a contract was signed with Tashir Capital, part of Samvel Karapetyan’s holding, to transfer the high-voltage network for the next 25 years, but already in 2018 the company refused to manage the High-Voltage Electric Networks.

All this can be regarded as political steps by the Armenian leadership, since during the economic crisis, the semi-blockade situation, and now the situation is worsening due to the coronavirus pandemic, it is difficult to see an economic motive in kicking out the “hens that lay the golden eggs” from the country. Experts predict that the Armenian economy could drop by 10-12%, if there is no second wave of the pandemic. Large foreign investors who went off Armenia left it alone with the main sphere of the economy, bringing revenues to the budget – mining plants, but over the past year, ore world prices fell by 30-40%.

As for gas, although the tariff for the population remained unchanged, for large consumers it was increased. As a result, there is an increase in prices for consumer goods, because an increase in gas prices automatically leads to an increase in prices for other goods. Experts have already dubbed this process the last nail in the Armenian economy’s “coffin”.

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