Policy Forum Armenia considers the recent issuance of a $500 million Eurobond by the government of Armenia as irresponsible and damaging for the country.

Armenia is undergoing a serious balance-of-payments crisis of its own making.

Over-reliance on remittances from Russia, unwillingness to allow the exchange rate to adjust, and continuous interventions on the foreign exchange market have resulted in significant overvaluation of the dram, serious loss of competitiveness, and significant decline in the Central Bank’s foreign reserves. The aggregate activity, including exports, has slowed down considerably in recent months and the fiscal conditions are deteriorating rapidly as a result.

Deep reforms are needed to move Armenia’s economy from an imminent collapse.

Issuing expensive foreign debt and attempting to pay one’s way out of the crisis will only delay the inevitable and result in even bigger losses for consumers, banks, and the sovereign balance sheet. The regime’s desire to avoid policy changes until the Genocide Centennial on April 24 will thus have serious consequences for the country and its population, a significant portion of which already lives in extreme poverty.

We call upon the international community and capital market participants to cease funding the regime in Yerevan in light of the overwhelming evidence of embezzlement of the proceeds and of the disastrous economic and social policies carried out by the incompetent and corrupt government of Hovik Abrahamyan.

Future democratic governments of Armenia will have every reason to declare these debts illegitimate and stop servicing them.

PFA Executive Board