Second influx of Russians into Armenia: risks for a small country
The second influx of Russians into Armenia
On September 21, after the Russian President signed a decree on partial mobilization, the second influx of Russians into Armenia began. More than 132,000 Russian citizens arrived in September alone. 128,000 left the country in the same month, but the mass exodus of Russians continues.
From January to August 2022, 654,648 citizens of the Russian Federation entered Armenia, while 615,808 left; since then about 39,000 people remain in the country. This is a large figure for such a small country.
Experts believe that the continued influx could lead to an increase in the level of poverty in the country, and even political and security risks.
How does the September migration differ from those who moved to Armenia at the beginning of the year, what prospects and risks can be expected. Opinions of experts – a political scientist and an economist.
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Distinguishing refugees: “ideological” and “draft dodgers”
Political scientist Eduard Antinyan labels the first wave of people who came from Russia as “ideological refugees”, saying that they are “intellectuals, the creative class.” Those coming now are “draft dodgers”:
“The second wave is people who fled in panic. These do not ideologically oppose the war, like those who said: we will not participate in this fratricidal war. The second influx is qualitatively different from the first. For new refugees, it doesn’t matter at all where they go – just some country without a visa policy.”
According to economist Nairi Sargsyan, the main difference between the two groups is in the level of solvency:
“While earlier mainly people interested in business came to Armenia, now it is mainly those who evade service coming, including Armenians from Russia. In this sense, the solvency of the second wave, I think, is incomparable with the financial capabilities of the first.
Economic Risks – Increasing Poverty
According to experts, both the first and second streams can benefit the Armenian economy. The Russians can to some extent fill a shortage of personnel in the construction sector, and thanks to them there is a certain revival in the services and hotel business.
At the same time the rise in real estate prices, including rent, affects locals.
Most of the Russians who have moved to Armenia live in the capital, but the increase in prices in Yerevan spreads to the regions in a chain reaction. This negatively affects the standard of living in areas where the situation is already difficult.
“If in Yerevan the salary of employees of some enterprises or certain areas of business can rise in parallel with inflation, this cannot be expected in the regions. In small towns and villages we will have an increase in expenses with the same level of income which may increase the level of poverty,” Nairi Sargsyan maintains.
“The influx of foreigners will hit the unsecured layers. After all, a house is rented out by the one who has additional housing, the apartment is sold by someone who at one time was able to buy it. As a result, a situation is created where the rich are getting richer, the poor are getting poorer, and the middle class is thinning out. And our biggest problem is this kind of social stratification,” adds Eduard Antinyan.
Business risks and how to mitigate them
Experts believe that both waves of visitors can bring economic benefits, but only if the government pursues a deliberate policy aimed at economic development.
“The government should direct the additional taxes exclusively to the development of the productive sectors of the economy and agriculture. This will help counter the predicted food crisis,” Sargsyan says.
“The government has a lot of serious work to do in terms of the functions of supervision and regulation. If money flows into the state, everyone wins. Now we need to think about how to distribute this amount, to distribute it to everyone. The government must make efforts to ensure that the funds are used for their intended purpose, businesses and jobs are created, and salaries are raised. It’s okay if prices of goods rise against this background. In the end, the problem is not the high cost of goods, but low wages, pensions and benefits,” Antinyan believes.
And businesses that, inspired by the current active flows, take large loans to expand or create a business, may find themselves in a difficult situation in the near future, Sargsyan warns:
“Business reacts very quickly to the demand and supply of services. Entrepreneurs can, for example, take loans from banks and open new cafes, restaurants, hostels or a business that provides space for rent. When the Russian flow leaves the country, these businessmen may have serious problems in repaying loans, up to and including losing their business.”
According to Sargsyan, such risks for entrepreneurs would be minimized if the government had a clear concept, structure and vision for the country’s economic development:
“Since the government does not direct it in any way, there is no economic forecast for the next five years, business is forced to respond to the demand of the day.”
According to the economist, business risks are aggravated due to tension on the Armenian-Azerbaijani border. He does not rule out that both local and foreign entrepreneurs who have invested in Armenia will think about moving to other, more promising countries:
“When a country is unpredictable, the future is in the fog, business naturally prefers to look for more predictable and stable countries. Business always follows profit. At the moment it is beneficial for them to stay in Armenia. Tomorrow there will be more profitable, comfortable and safe countries – they will leave.”
Nairi Sargsyan emphasizes that such processes will have a negative impact on the country’s economy.
Political risks
From a political point of view, Edward Antinyan emphasizes the need for an effective functioning of the national security system:
“We must be sure that Russian visitors will not be used for internal political destabilization in Armenia. The country is already vulnerable in this regard: there is a Russian base here, many of the strategic sectors of the economy have been placed at the disposal of Russia. And these economic objects have served as political levers for the Russian Federation against Armenia for many years.”
In January-June 2022, 1,059 Russian citizens received a residence permit in Armenia, 802 of them received the status of permanent residence, 257 temporary residence.
The number of applicants for citizenship is also growing.
“Interest in obtaining Armenian citizenship in 2022 increased drastically. This will be the highest figure over the past thirty years both in terms of applications for citizenship and in terms of the number of people who have resettled here and wish to obtain a residence permit,” Hovhannes Aleksanyan, responsible for repatriation issues at the Office of the Commissioner for Diaspora Affairs, states.
Eduard Antinyan considers the growth in the number of Russians applying for citizenship to be an alarming sign. The continuation of this trend, according to Antinyan, can turn into a real danger:
“While we can consider the situation a warning, I still don’t see a serious danger today. Nevertheless, so many Russians obtaining Armenian citizeship may become dangerous. And there are those who are actively pro-Russian even in business.
Even if these are private businesses, the Russian Federation has all the leverage to force them to fulfill Russian political orders if necessary. Creating instability through those who arrived here is not particularly difficult. We must be more vigilant.”
Manage the situation at the state level
According to Armenian experts, if the influx were controlled and directed by the government, it would be possible to achieve a more balanced settlement of visitors across the regions, and this would contribute to the economic revival of the country. According to analysts, this isn’t done owing to the lack of a government plan.
“If the government had such a targeted, long-term plan, it would focus on the resettlement of visitors. Moreover, for the second wave, most of whom are from small towns and villages of the Russian Federation, it is not so important whether they live in Yerevan or somewhere else. If a person did not bring a lot of money with him, he did not come to invest, but simply to work from a safe place; if he was sent, he would probably go to live in one of the regions with pleasure,” political scientist Edward Antinyan avers.
“If the government were ready to implement the program of uniform territorial development, we would already have the distribution of the inflow by regions. But the government should start reviving the regions as soon as possible. We need to build new buildings, improve infrastructure, create businesses. Otherwise the overcrowding of Yerevan will continue. And only the lack of housing stock and business premises in Yerevan will make Russians think about moving to the regions,” says economist Nairi Sargsyan.
The second influx of Russians into Armenia
