Prime Minister Tigran Sarkisian defended on Friday his government’s controversial gas agreement with Russia, saying that it will provide Armenia with cheap natural gas without limiting the country’s sovereignty.
Sarkisian insisted that unprecedented privileges granted to Gazprom are essential for keeping the gas price below international market levels and ensuring further capital investments in the domestic gas distribution network promised by the Russian giant.
“Sovereignty is threatened when authorities do not create favorable conditions for investments. This is what would endanger the future of our state,” he told a yearend news conference in Yerevan.
“People making investments need to be certain that their investments will have a certain degree of profitability in the long run. The essence of the matter has been totally distorted during the debate,” he said, attacking Armenia’s leading opposition forces highly critical of the deal.
The opposition argues the deal signed on December 2 not only raised Gazprom’s share in the Armenian gas network from 80 to 100 percent but also guaranteed a privileged status for the company. The current and future Armenian governments will not be allowed to change that for the next 30 years.
The government ceded its 20 percent share in the network in payment for a $300 million debt to Gazprom, which it has incurred since 2011 as a result of secretly subsidizing the gas price for Armenian households. Opposition leaders say that this was done illegally for boosting President Serzh Sarkisian’s and his Republican Party’s chances in the most recent national elections.
Tigran Sarkisian sought to justify the secret subsidy, saying that the government did not acknowledge until recently the increased cost of Russian gas because it was still negotiating with Gazprom. The latter mostly reversed a 50 percent price hike this fall after the Armenian leadership agreed to a join a Russian-led customs union.
Sarkisian, who publicly spoke out against Armenian membership in the union as recently as in February, defended the foreign policy U-turn. He said the Russian-led trade alliance will create “grounds for sustainable economic growth” by boosting Russian investments in Armenia and giving local manufacturers easier access to the Russian market.
The premier cited no figures or growth estimates to back up his assurances, however. His cabinet has made no upward revisions of its mid-term economic growth forecasts since President Sarkisian announced on September 3 his decision to make Armenia part of the Customs Union.
Deputy Economy Minister Karine Minasian said recently that economic growth will average 4.5 percent for the next several years. The government forecast in its five-year policy program approved by parliament in May that the Armenian economy will expand by 5-7 percent per annum.
President Sarkisian said in March that the government will have to step down if fails to ensure a 7 percent growth rate in 2013. Government officials in Yerevan now admit that GDP growth will at best come in at just over 4 percent.
Nevertheless, Tigran Sarkisian made clear on Friday he and his government will not be sacked. “The leader of our political team simply set a stricter target for us,” he said. “The purpose of that [March statement] was to get government members to do their utmost to ensure economic growth in our country.”