Page 42 - bne Magazine Apri20

42 I Cover story bne April 2020
Armenia
VIRUS UPDATE
• Number of cases as of March 27: 329
• Number of deaths as of March 27: 1
• Comment: Armenia reported its first coronavirus
(COVID-19) death (that of a 72-year-old woman with coronary heart disease and other underlying problems) as late as March 26.
Perhaps the biggest pandemic dilemma of the small, impoverished country, home to just short of 3mn people is that it neighbour Iran, a country of 82mn, is enduring one of the world’s worst coronavirus outbreaks. The borders with Iran and Georgia have been closed. The borders with Azerbaijan and Turkey, with which Armenia does not have diplomatic relations, have long been closed.
Since March 25, police have been enforcing a nationwide lockdown.
Anxiety over the economic consequences of the pandemic for Armenia is naturally mounting. A big blow will come from foreigners’ cancelled holidays. Tourism accounts for 16% of Armenia’s GDP.
The spread of the coronavirus is set to have a short-lived but drastic impact on Armenia’s economy, economy minister Tigran Khachatryan said on March 18. “It will have a short, drastic impact. We’ve already seen consequences in different spheres of economy, but I’m sure it will become stronger...,” Khachatryan told a press briefing.
Armenia has postponed its constitutional referendum on reforming the judiciary, which was set to take place on April 5.
PUBLIC HEALTH MEASURES
• Nationwide lockdown in force since March 25 and due for review after a week. A state of emergency was declared on March 16. Armenia’s fourth-largest city, Vagharshapat, was shut down on March 15 after a spate of recorded infections. Also known as Echmiadzin, it is the spiritual centre of the country and home to around 46,000 people.
• Armenians leaving their homes must carry identity credentials and self-completed forms explaining their
reason for being outdoors. The information must include destination, duration outside, and the time the person left as well as the estimated time when he or she plans to return home.
• Schools and other educational institutions have been entirely closed as part of the lockdown.
• On March 12, the Armenian central bank said it would gradually replace used banknotes with new ones to try to prevent the spread of infections. It advised people to avoid making cash payments where possible.
ECONOMIC MEASURES
• Government to unlock $305mn (2% of GDP) for companies and entrepreneurs to assist them in dealing with the economic impact of coronavirus outbreak. Targeted subsidies of up to 500mn Armenian dram (around $1mn) are available per business to pay salaries (of up to 500,000 dram per month per employee), to pay taxes, to buy raw materials produced in Armenia, or to import equipment for use to manufactured goods in Armenia.
• Armenia’s central bank on March 17 cut its key rate to 5.25% from 5.50%.
• Armenia’s economy ministry said it was researching the depreciation of the Russian ruble amid the outbreak- associated oil price collapse so that it can accurate signals to Armenian manufacturers and exporters. Russia is Armenia’s main trade partner, thus the Armenian economy is vulnerable to ruble instability.
• The exchange rate has been allowed to adjust flexibly and has depreciated around 3% against the dollar since the end of February. No balance of payment or capital control measures have been adopted.
ECONOMIC FORECASTS (where available)
• Fitch has revised its banking sector outlooks to negative for all three South Caucasus countries, namely Armenia, Azerbaijan and Georgia.
Azerbaijan VIRUS UPDATE
• Number of cases as of March 28: 182 • Number of deaths as of March 28: 4
• Comment: There is considerable doubt over the accuracy of the official coronavirus data in Azerbaijan – a country of 10mn that borders Iran, one of the worst-impacted nations in the pandemic – but there is no doubt that
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