Azerbaijan's Entire Economy Set to Collapse

As you probably know by now oil prices have plummeted, resting near the $40 a barrel mark, and expected by some to slide further still. According to Google, and disregarding increased production for the sake of simplicity, Azerbaijan pumps out about 800,000 barrels of oil a day. That's quite a bit even by today's numbers, amounting to something like $32,000,000/day or about $11.5 billion dollars a year in an economy with a GDP of about $53 billion a year. That's a staggering 20% of the production from oil. But wait, the $53 billion figure could be off, as the 2008 average price of crude was $100, give or take, thus Azerbaijan could have a shortfall of about $17,000,000,000. And with all the crisis, Aliyev still wants to continue spending money that it does not have, as evidenced by their $2.5 billion debt, though likely much more now, in his ultimate wet dream to equal his military spending to Armenia's GDP.

And all this when more Azeris than Armenians live on less than $2 a day, even with the fact that Armenia has zero oil and an economy roughly less than one fourth the size.

So, should we call the bookies?

Armenia Exports Bananas...NOT!

You must be thinking that I've gone B-A-N-A-N-A-S! Hetq found this bit of statistical curiosity and decided to investigate:

In 2006, Armenia exported 3002 tons of bananas to the Bahamas and 91 tons to Georgia. In 2005, 594 tons of bananas were exported to the Bahamas. The Republic of Armenia’s State Council on Statistics provided these figures.

If you're thinking WTF, you're not alone. Surely bananas don't grow in Armenia, so how can they be exported to other countries? Funny you should ask.

...in 2005-2006 the "Ketrin Ltd" firm exported 59.44 kilos of banana oil to the Bahamas, an amount equivalent to the 755.4 tons of bananas imported on a temporary basis for reprocessing purposes...

So some statistical bluffing, then? Sure seems wasteful to ship bananas from the Bahamas to Armenia only to ship it back, especially given the high cost of trasportation in the last couple of years. But there's more!

The "Godfather of Bananas" was Grisha Harutyunyan, the former Deputy Chief of the National Security Service. He in fact owns "Ketrin Ltd". He has been lining his pockets with untaxed profits for years on end. We’re not talking about $1 or $2 million, but rather tens of millions of dollars.

A tale of greed and the shadow economy: that's more believable!

Source: Hetq

Armenia's Diamond Trade in Decline

The stone itself may last forever, but its trade certainly doesn't!

Armenia's diamond trade overall however has hit a rough patch in the past two years. Armenia reported a 35 percent decline in rough imports from all nations for the first couple of months in 2007, following an overall diamond export drop of 20 percent in 2006 to $212 million.

The article does not mention the reasons for this decline, but I suppose it has to do with cheaper labor in places like India and globalization. Anything can be blamed on globalization!

Source: Rapaport News