Armenia: COVID-19 Eases, but Armenia is Badly Shaken

Richard Giragosian, Regional Studies Center (Yerevan, Armenia)

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With rare good news in the challenge to manage the public health crisis created by the coronavirus (COVID-19) pandemic, the Armenian government moved forward with plans to further reopen the economy and is likely to not extend the state of emergency as statistics revealed a consistent decline in daily cases of infection. The country was shaken by an unusual direct attack by Azerbaijani forces, however, which quickly escalated before abating on the fifth day of fighting, leaving some 17 dead on both sides.


Domestic Policy

COVID-19 Crisis Improves

After months of mounting concern, national statistics revealed a marked improvement in the handling of the COVID-19 public health crisis in Armenia. Prime Minister Nikol Pashinyan noted on July 30 that the country will be able to overcome the coronavirus crisis by September, stressing the “substantial” drop in daily infections, with less than 9,000 active cases for the first time since mid-June. The Ministry of Health reported a steady decrease in the daily average of 550-600 cases in July, which declined to about 400 daily cases by the end of July. According to Deputy Prime Minister Tigran Avinyan, the government hopes to reduce the daily number of new cases to roughly 140 by the beginning of September, thereby allowing the reopening of schools that were shut down in March.  

On July 29, Ministry of Health spokeswoman Alina Nikoghosyan attributed the improvement to the enforcement of social distancing, the mandatory wearing of face masks in public, and other government-imposed restrictions. For his part, Health Minister Arsen Torosyan also noted that earlier concerns over an overwhelmed health care system have eased, as around twenty percent of intensive-care hospital beds remain available.


Opposition Party Loses Parliamentary Seat

In part reflecting the pressure of looming criminal charges against oligarch Gagik Tsarukyan and his Prosperous Armenia party, one of his parliamentarians resigned on July 23.  The departure of deputy Sergey Bagratyan is a blow to the party, which as the second largest parliamentary bloc has become embattled since its outspoken shift in opposition to the Pashinyan government in early June.  Bagratyan has become embroiled in his own corruption investigation and may face charges related to alleged financial impropriety during his tenure as governor of the Vayots Dzor region from 2010-2012. Although Bagratyan has vowed to remain as an independent deputy, the departure leaves the opposition party with 24 seats in the 132-seat parliament. 



“Prime Minister Nikol Pashinyan noted on July 30 that the country will be able to overcome the coronavirus crisis by September”




Tax Collection Declines

As an important indicator of the downturn severity for the Armenian economy, the State Revenue Committee (SRC) announced on  July 20 that tax collection has declined by 4.6% in the first half of the year, attesting to the impact of the coronavirus-driven recession. In the tax reporting for the country’s 20 largest businesses, a domestic tobacco company remained the largest corporate taxpayer, paying $54 million in various taxes from January-June. The national gas distribution company owned by Russia’s Gazprom giant was the second largest, followed by the large Zangezur Copper-Molybdenum Combine (ZCMC) mining company.  In addition, the 1,000 largest corporate taxpayers, accounting for more than 72% of all tax revenue, contributed just over $1 billion in combined tax revenue. 


Western Funding Approved for Solar Energy

In an announcement on July 15, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) approved $17.7 million each in financing a solar energy project supported by the World Bank. With another 3 million euros ($3.4 million) from an EU “investment grant,” the Spanish renewable energy company Fotowatio Renewable Ventures (FRV) will build Armenia’s first large solar power plant. The company contracted with the Armenian Energy Ministry back in July 2018, after winning an international tender for the construction of the planned 55-megawatt facility near Lake Sevan.  

Once completed, the new plant will ease Armenian energy dependence, which currently relies on imported fossil fuel for roughly 70% of its electricity production. As part of this renewable energy project, the Armenian government approved a $9 million contract earlier this month with the Russian Kaskad-Energy company to reconstruct and modernize an electricity substation located nearby that will handle electricity transmission from the solar plant. 


Foreign Policy

Border Clashes Erupt After Azerbaijani Attack on Armenia

The clashes on the Armenia-Azerbaijan border tensioned on July 12. In a series of three failed attempts to seize a strategic hilltop on the Armenian side of the border, the skirmishes quickly escalated until abating on July 16, with at least 12 Azerbaijani soldiers, including a general and several officers, and five Armenian soldiers killed in the fighting.  

Another dozen or so of Azerbaijani military unmanned aerial vehicles (UAVs) were also downed or destroyed by the defenders.  The fighting broke out some 300 kilometers from the so-called “line of contact” between Karabakh and Azerbaijan.  Throughout the clashes, the Karabakh frontline remains peaceful and calm despite occasional ceasefire violations there consisting of sporadic sniper fire.


Armenian Defense Minister Visits Nagorno Karabakh

On a two-day visit to Nagorno Karabakh (Artsakh) from July 30-31, Armenian Defense Minister Davit Tonoyan met with senior officials and the Karabakh Army commander, Major-General Jalal Harutiunyan, and inspected military positions. The visit is seen as a demonstration of Armenia’s commitment to defending Karabakh in the face of renewed military threats by Azerbaijani President Ilham Aliyev that Armenian forces “must leave our lands before it’s too late.”  Several frontline units of the Armenian armed forces were also put on heightened alter on  July 31 after the start of a large military exercise between Azerbaijan and Turkey on  July 29 that included artillery, armored units, infantry and combat aircraft. According to the Armenian Army’s Chief of Staff, Lieutenant-General Onik Gasparyan, the alert coincided with a test of readiness and an inspection of ballistic missile sites and long-range artillery systems.


New Tension in Armenian-Russian Relations

Armenian relations with Russia suffered fresh tension after Russian law enforcement officials announced on July 30 that another Armenian fugitive will not be extradited to Armenia despite an outstanding arrest warrant issued in May. The announcement effectively shields Armenian oligarch Ruben Hayrapetyan from prosecution after he fled to Russia in March to escape criminal charges.  The fugitive, who holds dual Armenian and Russian citizenship, was a close associate of the former Armenian President Serzh Sargsyan and was well-known in Armenia for acts of violence, corruption and criminal activities.  Hayrapetyan, who was also once the head of the Football Federation of Armenia (FFA), joins the stream of other former senior Armenian officials currently hiding in Russia to evade criminal prosecution in Armenia.  

Bilateral relations have also been under greater strain in recent months, exacerbated by Russian pressure on Armenian leaders and difficult gas price negotiations. . The most notable example came on July 28, when Prime Minister Pashinyan forcefully rejected allegations reported in Russian state-run media accusing him of undermining relations and supporting Western-funded groups hostile to Moscow. On July 21  Margarita Simonyan, the ethnic Armenian editor of the “Russia Today” television network and other Kremlin-funded media outlets, accused Pashinian of turning Armenia into a “bridgehead of anti-Russian forces in the Caucasus” and of having “inundated” Armenia with NGOs that are “training young people how to overthrow the government in Russia.” In a social media post, Simonyan also heatedly denounced Armenia’s failure to formally recognize Russia’s annexation of Crimea and defended former Armenian President Robert Kocharian, who she termed “Russia’s perennial ally,” against ongoing criminal charges.


Armenia Calls on Israel to Halt Weapons Deals with Azerbaijan

Armenian Foreign Minister Zohrab Mnatsakanian called on Israel to stop supplying weapons to Azerbaijan. In a more detailed statement published on  July 29 in an interview with “The Jerusalem Post” newspaper, the Armenian foreign minister warned that the “arms trade with Azerbaijan is fatal because Azerbaijan never hesitates to use those weapons against civilian infrastructure and the civilian population,” adding that “Israel should stop this deadly business with Azerbaijan.” For much of the last decade, Israel has sold billions of dollars worth of advanced military hardware to Azerbaijan, with much of these advanced weapons, including anti-tank rockets and attack drones, in the several days of fighting over Karabakh in April 2016.  More recently, Azerbaijani forces also deployed Israeli-manufactured drones against Armenian military and civilian targets during the recent deadly fighting on the Armenian-Azerbaijani border in mid-July.


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