Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Russia's National Welfare Fund accounts for almost 12% of GDP
Police arresting activists ahead of Saturday’s demonstration in support of Navalny
Biden seeking a five-year extension to START II missile treaty
Russian consumer confidence index drops q/q, y/y in 4Q20
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
Private finance mobilised by development banks up 9% to $175bn in 2019
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
OUTLOOK 2021 Romania
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Tehran Stock Exchange chief quits amid “Black Monday” fury
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
More...
On a normal evening, the Calumet bar in central Yerevan has a packed crowd of hipster locals, repatriated Armenians, and tourists dancing to modern versions of classic Armenian folk tunes. After midnight on weekends, it’s so crowded the Armenian phrase applies: “If you drop a needle it won’t pass through.”
These days, it’s a very different scene. On a recent visit, there were fewer than 10 customers. The music was soft, and several of the clientele were playing checkers or backgammon.
Customers are afraid of the closed space – the bar is underground with no windows – and in any case aren’t spending much. “Indoor places frighten people,” said Sevag Davidian, a co-owner. On top of that, he told Eurasianet, “customers can’t spend as much as they used to. Almost nobody is ordering expensive drinks,” opting for $1-2 beers rather than the $8 Long Island iced teas. Overall, business is down 80 percent, Davidian said.
When Armenia ended its coronavirus lockdown in early May, even as the epidemic’s spread was accelerating, the government cited the need to keep the economy going and let people get back to work. For a time after reopening, Armenia had one of the world’s worst infection rates. And nearly three months on, the economy has continued to suffer.
Nevertheless, many Armenians believe the government had no choice. “We have enough information now, including the reactions of people and businesses to these kind of [lockdown] measures, to say that fully shutting down the economy is not the most effective measure,” Artak Manukyan, an economist and a member of parliament for the ruling My Step coalition, told Eurasianet.
For the most part, Armenians have supported the government’s strategy. Ninety percent of Armenians are worried about the coronavirus’s impact on the economy, with 71 percent “very concerned,” according to a newly released poll by the International Republican Institute. At the same time, 71 percent of those polled were overall satisfied with the government’s response.
Some economists disagree. “Lifting the lockdown in May was a mistake,” said Hrant Mikaelian, an economist at the Yerevan think tank Caucasus Institute. Mikaelian draws a comparison with neighbouring Georgia, which imposed a stricter lockdown and kept it in place for much longer than did Armenia.
While Georgia has had a significantly lower spread of the disease – 1,160 total infections and 17 deaths, compared to more than 38,000 infections and 728 deaths in Armenia – its economy performed roughly the same. In May, according to government data, Armenia’s economy contracted 12.8 percent compared with May 2019, while Georgia’s contracted 13.5 percent. “Georgia’s economic decline is very similar to what we see in Armenia,” Mikaelian told Eurasianet. “But compared to Armenia, Georgia saved hundreds of lives.”
In June, Armenia’s economy declined 7.5 percent compared with the same month a year before; the comparable statistics for Georgia are not yet available, but it was in late May and early June that Georgia ended its lockdown. “From what we could observe in May, the absence of the lockdown did not save the Armenian economy. It was the pandemic that hit the economy hard, not the lockdown itself,” Mikaelian said.
In its July update on Armenia, the World Bank also suggested that the ongoing spread of the disease could continue to slow the economy: “The recovery is likely to remain sluggish. The lifting of most mobility restrictions was accompanied by a strong increase in new infections (on average 550 new cases in the first week of July). This remains a barrier to economic recovery.”
Armenia’s service sector, including bars and restaurants, has led the slowdown.
Many small business have been able to stay afloat with the help of a variety of government stimulus efforts. Kond House, another trendy bar in Yerevan, got an interest-free loan and its employees a one-time payment that helped it survive the difficult spring, said owner Narek Bakhtamyan. Now, helped by a large outdoor space and a clientele of mostly locals, the bar is relatively thriving, he said.
“It was definitely the right decision to open up in May,” Bakhtamyan told Eurasianet. “There was a time at the beginning of the pandemic when even if we were allowed to stay open no one would have come, everything was confusing. During the one-and-a-half months of lockdown, they managed to strengthen the health care system and opened up the economy as quickly as they could.”
But Davidian, of Calumet, said the government aid he got wasn’t enough and that there really was no choice but to reopen his basement bar, given what he saw as the futility of the coronavirus fight and the ineffectiveness of the bailout.
“If the lockdown had been properly implemented in the beginning, the situation would be different, but it wasn’t. By May it made no sense to keep the economy closed, the damage was already done,” he said. “And if the government support was more comprehensive, businesses could handle a longer lockdown, but in this case it wasn’t.”
Economic projections around the world have become progressively more pessimistic as time has passed, including in Armenia. “Before, we were projecting a 2 percent decline [for 2020], now the central bank says it will be 4 percent,” Manukyan of My Step said.
To help soften the blow from the service sector decline, the government has been spending on infrastructure to try to jump start the economy: Manukyan said that the government has started 100 new construction projects. “It’s clear that the 2020 decline will linger, affecting the economy for two more years,” he said. “In 2023 there is a chance to fully return to normal.”
Ani Mejlumyan is a reporter based in Yerevan.
This article originally appeared on Eurasianet here.
Register here to continue reading this article and 5 more for free or purchase 12 months full website access including the bne Magazine for just $250/year.
Register to read the bne monthly magazine for free:
Already registered
Password could contain only a-z0-9\+*?[^]$(){}=!<>|:-_ characters and have 8-20 symbols length.
Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.
Forgotten password?
Email field can't be empty.
No user with this email address.
Access recovery request has expired, or you are using the wrong recovery token. Please, try again.
Access recover request has expired. Please, try again.
To continue viewing our content you need to complete the registration process.
Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.
If you have any questions please contact us at sales@intellinews.com
Sorry, but you have used all your free articles fro this month for bne IntelliNews. Subscribe to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free subscription to bne's digital weekly newspaper to subscribers to the online package.
Click here for more subscription options, including to the print version of our flagship monthly magazine:
More subscription options
Take a trial to our premium daily news service aimed at professional investors that covers the 30 countries of emerging Europe:
Get IntelliNews PRO
For any other enquiries about our products or corporate discounts please contact us at sales@intellinews.com
If you no longer wish to receive our emails, unsubscribe here.
Magazine annual electronic subscription
Magazine annual print subscription
Website & Archive annual subscription
Combined package: web access & magazine print annual subscription