Gas: method of pressure

07/02/2006 Armine AVETYAN

As a result of the discussions on the gas price increase, consumers have already adapted to the inflation that awaits us and they are even calculating their expenses-what they must buy less of so that they can fight against the danger. Meanwhile, our Armenian authorities are instilling hope in the people, telling them that the price will not reach 110 dollars and even if it does, the authorities will find the necessary resources just so there will not be a crisis.

“We only have to pay money for gas, nothing else. It is not right to exchange property for gas,” say the authorities after finally getting the picture.

As to what the Prime Minister meant by internal resources, it is hard to predict especially since the budget has already been fixed and there is nothing about the gas price increase. Perhaps he also agrees with Dashnak (federalist) Vahan Hovhannisyan that there is a huge shady sector in Armenian economy and that we can lessen the shade by perfecting the customs and tax mechanisms, make income legal and compensate the gas price increase. This is possible. What’s nice to know is that our authorities have finally decided to lessen shady enterprise. There was an opinion that by internal resources they mean the oligarch’s resources. But the average consumers don’t believe in all this because it is hard for them to believe that our customs officials will start taxing benzene and sugar. They know very well that the monopoly of importing those products is in the hands of oligarchs. How are taxing and customs officials going to pay their shady payments by getting out of shady enterprise? Perhaps the internal resource is that the authorities will start calling the oligarchs and force them to pay a certain amount of money for the sake of the Homeland? Consumers are not so happy about this either because they know that oligarchs don’t like just giving money away, especially since they will not get anything back-not even a vote. They will get their money back by increasing the price on their products, or they will come up with other methods. In any case, the announcement “internal resources in order to compensate the gas price increase” doesn’t instill too much hope.

Although National Assembly MP and member of the “Justice” alliance Tatul Manaseryan doesn’t go along with Russia’s plans, however, he is suggesting many other ways of benefiting from the energy field. According to him, we can use water resources in order to get electricity, industrial resources, construct new storages for storing the main sources of heating, set limits on the use of heating and electricity, create mechanisms through which it will be possible to heat from one place to another, create a universal heating/electricity complex, etc. According to Manaseryan, Armenia is politicizing the Russian gas price increase too much and believes that there are no motives to pressure Armenia. This is based on economics. He is of the same opinion as the leaders of the country imposing the gas price.

“The World Trade Organization (WTO) has required its member country Russia to set high prices on energy resources and selling gas to any country at a special price will be considered discrimination,” says T. Manaseryan.

The economist believes that Armenia must compensate the gas price increase in other economic fields.

“For example, the “Property in exchange for debt” transaction. Those kinds of establishments not only don’t work, but also, they have many debts. Armenia can receive economic dividends from the strategic ally; some Armenian businesses may be integrated into Russia’s military industrial complex,” says the MP economist and adds, “we must not talk too much about the military bases. In this case, we really do have a strategic ally. Does any other country support us like Russia? Armenia should make the decision. We must have good relations with all countries, but to go and hurt relations just because of a gas price is not good for us.”

Economist Edward Aghajanov believes that Russia is using the gas price increase as a method of pressuring Armenia and other countries.

“If Russia wants to get profit and is doing that with the gas price increase, then it should increase it up to 70-80 dollars,” says Mr. Aghajanov. “In this case, “GasProm” will still get a lot of profit.”

After Robert Kocharyan returned from his trip to Moscow, Russian media claimed that Russia would not increase the gas price for Armenia if Armenia goes along with the proposals. In other words, Russia is not that afraid of the CIS countries and the European Union and can provide gas to its ally at a low price if, of course, Armenia gives 45 percent of the Iranian-Armenian gas pipeline to Russia, hands over control of the Iranian transit gas in Armenia and the 5th energy block of the Hrazdan Water Electricity Station. Representative of “GasProm” Dennis Ignateyev also made this kind of announcement. True, the Armenian side rejected this, claiming that Robert Kocharyan had not accepted this offer. However, it is hard to consider Russia’s offers in order to keep the gas price at the same economic price. You don’t have to be an economist to understand all that. But we can understand how the political figure’s mind works.