ARMENIA WITHOUT ARMENIANS

The worst wave of migration since the beginning of the war (the Armenian-Azerbaijani conflict - R+) awaits Armenia, so says a study conducted by the authorities, according to the Armenian media. The Haykakan Zhamanak newspaper (Armenian Times) writes that if the current political situation continues, another 300,000 people will leave the country before the end of the year.

One source told the newspaper that this number does not include those Armenians who have migrated to Georgia - they are regarded as living in Armenia, since most of them work in the neighbouring country and still visit their homeland periodically.

According to the same study, the increased level of migration is linked to the disappointment and lack of belief by 80 per cent of the population in the future. "To stop this process, people must believe in tomorrow once again. But this problem can only be solved by a change of government. A change of power, or Armenia without Armenians - this is the conclusion to be drawn from the study", writes the paper.

However, experience shows that a change of government cannot correct the political, economic, and consequently, demographic situation in Armenia. Yerevan is gripped within its own aggressive policies towards almost all of its neighbours. Because of this policy, large-scale regional economic projects bypass Armenia. As a result, the country's population is forced to eke out a miserable existence, while their regional neighbours have begun to live no worse than in most developed countries of Europe.

At the same time, there is way out of this unenviable situation; the starting point is a settlement of the Armenian-Azerbaijani Nagornyy Karabakh conflict.

Yerevan is also aware of this. However, if Armenia's ruling Karabakh clan does not have the courage to admit it to its own people, the opposition represented by former president Levon Ter-Petrosyan is talking about the vital importance of first settling the conflict for the future of Armenia itself.

Back on 26 September 1997, Ter-Petrosyan, the then president of Armenia, held an extended press conference at which he made a surprise statement. "In the future, we will be asking for what we reject today, but we won't get it...," he said. "We must be realistic and understand that the international community will not tolerate the situation around Nagornyy Karabakh for a long time, since this situation represents a threat to regional cooperation, security and the West's oil interests."

And, most importantly, Levon Ter-Petrosyan even then openly admitted that Armenia faced a choice: either to compromise on the Karabakh problem, or accept economic stagnation and low living standards for many years. "Armenia will not become a normal state. We will not live well until the Karabakh problem is solved and the blockade is eliminated. Either - or. Or we should tell the world: move over, we ourselves will solve our problems, we are confident in our abilities and will not go for concessions. But in this case, no-one has the right to demand better living standards; on the contrary, we will have to get used to the idea that living standards will decline even further. Or, if we want to live well and develop our economy, we should have the courage to go for serious mutual concessions", he said.

Fourteen years have gone by since then, and time has shown that the people of Armenia should have listened to Levon Ter-Petrosyan, who was overthrown by the current leadership of Armenia. He hinted at this in a recent interview with the BBC's Russian Service.

According to him, the reason for the failure of the then settlement plan was that "Karabakhis (the current Armenian leadership) took a maximalistic position and decided that it was not enough and that they could exert more pressure and get more."

What did the Karabakh clan get by deciding to "exert more pressure"? Today on the negotiating table are proposals whose essence boils down to the same phased settlement plan that was discussed in 1997. That is, the international mediators' proposals have remained almost the same. But the regional balance of power has undergone serious change. The situation of which Armenia's first president warned is quite clear today. Isn't this a reason for the authorities' chief opponent to convince people of his far-sightedness?

While 300,000 people will leave Armenia in search of a piece of bread this year, tens of thousands of foreigners come to work in Azerbaijan every year. Just last year, about 10,000 foreigners and stateless persons received individual permits to work in the country. And this figure does not include illegal arrivals. According to official figures, people from 92 countries currently work in Azerbaijan. Isn't that food for thought?

Here is another example. The study by the Armenian social scientists found that about 60 per cent of the population is dissatisfied with the country's economic situation. This was reported by the director of the Armenian branch of the organization Caucasus Research Resource Centres (CRRC), Egine Manasyan, in summing up the poll conducted by USAID, CRRC and the Eurasia Foundation.

The study was conducted in all regions of Armenia, with 1,549 people being surveyed by interviewers in random order.

"It should be noted that the number of those unhappy with the economic situation has increased by 16 per cent compared with 2008," Manasyan said.

According to the project manager, 69 per cent of respondents named unemployment as a serious problem, while other problems include inflation, poverty, low incomes, corruption and emigration.

"The problem of inflation in 2010 worries almost twice as many people as it did in 2009", said the director of CRRC-Armenia.

That this state of affairs is quite typical is graphically illustrated by our diagrams, which compare the basic macroeconomic indicators of Armenia and Azerbaijan. Our study showed that while in 2000, according to official data, Azerbaijan's GDP was 2.7 times higher than that of Armenia, 10 years later, it was 5.5 times higher. In terms of per capita GDP, Azerbaijan and Armenia were almost equal in 2005, while in 2010 Azerbaijan's figure was twice that for Armenia.

Whereas in 2005 Azerbaijan's budget revenues exceeded the revenues of the Armenian treasury by 2.6 times, in 2010 the difference had  increased to 7 times. Accordingly, the difference between state budget expenditure in Azerbaijan and Armenia was 2.5 times in 2005, while last year it increased to 6.4 times.

The balance of power is no less eloquently characterized by the size of strategic currency reserves; Azerbaijan's reserves are 16 times greater than Armenia's.

Against this background, it is worth looking at the ratio of the countries' external debt to GDP. In Azerbaijan, the ratio is only 7.42 per cent, in Armenia, however, in 2010 public debt accounted for 44 per cent of GDP, coming close to the critical level of 50 per cent.

In 2009, Minister of Finance Tigran Davtyan assured the people of his country that, its external public debt would not come close to the critical level in the period to 2025. He said that over the next 10-11 years, the foreign debt would increase to a maximum of 37-38 per cent against the 13-14 per cent in 2008. But time has refuted the minister's prediction; just two years were enough to dispel this myth.

Today, Armenia has a rather high level of external debt, and it has almost no reserves left to attract major international credits. Thus, having driven itself into isolation, and being sidelined from large-scale regional projects because of its territorial claims on its neighbours, Armenia is also losing its last chance of getting foreign loans.

The situation is completely different in Azerbaijan, which has been lending to projects abroad in recent years. A good example is Azerbaijan's preferential lending for the construction of the Georgian section of the Baku-Tbilisi-Kars railway. Moreover, with the growing possibilities for its budget, Baku is increasing state funding in virtually all spheres of life. Among other aspects, Azerbaijan's defence spending is increasing, which causes no pleasure in Armenia.

Of course, Yerevan has something to worry about - Azerbaijan's military budget is equal to the Armenia's entire state budget, and Baku does not intend to give up its sovereign right to liberate its territories by force of arms. Therefore, Armenia and pro-Armenian circles in several countries are trying to present the strengthening of Azerbaijan's military power as a militaristic policy or sabre rattling to the international community. However, it is worth noting that defence spending is just one of the items in Azerbaijan's state budget expenditure, and it is growing in parallel to other items, which is quite natural for general economic development. In other words, the difference in the overall development of Armenia and Azerbaijan could not but affect the military sphere, as we observe.

Moreover, our findings reflect the picture up to 2010, when the world had just begun to recover from the global crisis. Today the situation is changing - world consumption is growing, oil and gas are becoming more expensive, Baku is increasing investment in the non-oil sector and the social sphere, while Yerevan is still hostage to its own ambition. Accordingly, the gap between Azerbaijan and Armenia is increasing day by day.

Thus, the boomerang launched by Armenia in the final years of the Soviet Union is swinging back, and Armenia, we can say, will escape with minimal losses if it sweeps away the country's authorities on its way.