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New Reality in Armenia with Influx of Those Fleeing Effects of Ukraine War


YEREVAN — As Russia’s invasion of Ukraine enters its fourth week, its effects are being felt as far away as the Armenian capital. Across downtown Yerevan, a similar scene plays out almost daily as crowds of tall, Slavic-looking people — men, women, children, often entire families — conspicuously shuffle about, dragging carry-on luggage behind them as they look for their AirBnBs or hotels.

They are part of the more than 50,000 people estimated to have migrated to Armenia since hostilities began in Ukraine on February 24. The vast majority of new-commers are Russians escaping increasingly brutal political repressions back home as well as rumors of an impending martial law which could see many of them trapped inside Russia. However, smaller numbers of Ukrainians (believed to include those who had been stuck in Russia as well as ethnic-Armenian Ukrainian nationals repatriating) and Belarusians are also looking to make Armenia home.

IT professionals and other highly skilled people make up the bulk of this new wave of Russian émigrés, as entire Russian and international companies continue to relocate their operations to the Armenian capital to avoid the effects of Western sanctions. At least 140 companies relocated, or opened new offices in Armenia in the first two weeks of the war. 113 of these are from Russia, while smaller umbers of Ukrainian, Belarusian, Moldovan and Kazakhstani-registered firms made the move as well, motivated in part by Armenia’s ease of doing business which includes tax wavers for startups, and a particularly low turnover tax rate among many other benefits.

“Our company sent us a message on Saturday morning announcing that they chartered a bus to Demededevo [Moscow’s International airport] later that same day to relocate us to Yerevan,” said Sasha, an IT worker from a city in central Russia. Sasha, whose last name and place of work were withheld for security reasons, says he packed up what he could carry, took his family and flew to Yerevan where his company also maintains offices. “We knew the Caucasus had a tradition for hospitality, but I was surprised by how warmly we were welcomed,” he added.

For many escaping Russians, however, Yerevan was simply one of few remaining options as tit-for-tat overflight bans between Moscow and Brussels closed up most European destinations. “We chose Armenia because it’s close enough and remains one of few places in Europe that isn’t hostile to Russians,” Igor, another newly-arrived Russian, told the Mirror-Spectator. Armenia’s pro-business regulations also make it easy to work out of. Igor noted he was able to find an affordable apartment and open a bank account and is now waiting for his wife and children to join him in Yerevan.

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Not all Russian arrivals have been this lucky however. The sudden influx of desperate Russians with money to spare has encouraged some more opportunistic landlords to hike up rents, often to absurd levels. Within two weeks, apartments listed on popular real estate sites doubled and even tripled in price. As a local website MediaLab put it “Apartment rental prices in Yerevan now compete with New York.”

This disruption in the housing market has triggered calls for more regulatory oversight and more protection for renters’ rights. Such regulations are actually already in place, however, since the Armenian Revenue Service considers rental income to be a form of taxable employment, renters and landlords often eschew rental contracts altogether in favor of verbal agreements which often leave both parties legally unprotected.

Elodie Dernigorossian, a French-Armenian repat was told by her landlord to agree to a 25-percent hike in her rent or move out. When she finally agreed given the difficulty of finding another place to live, the landlord told her that the price had now doubled. He had already lined up a visit for new potential renters.

She, along with other renters now facing eviction have teamed up to fight back against what they see at the shortsighted greed of certain landlords. “It’s not fair to longtime residents to be thrown out into the streets for the landlords’ short-term gain,” she complained. This group has been posting examples of absurdly priced rental units online in an effort to shame their owners and galvanize local support. Others have also formed groups to connect renters to landlords committed to maintaining market rates.

Supply Chains Disrupted

Skyrocketing housing costs are not the only Ukraine War-related turbulence that Armenians must now contend with. Major disruptions to global supply chains have compounded the effects of COVID-induced inflation being felt in Armenia, as concern rises over availability of basic food staples like cooking oil and flour, which are mostly imported from Russia and Ukraine. In an effort to curb the effects of inflation, which is expected to reach 6.5 percent this year, the Central Bank of Armenia (CBA) has raised its benchmark interest rate to 9.25 percent — a 1.25 percent hike. The CBA also slashed its GDP growth estimate from 5.3 percent to 1.4 percent due to the war.

On Tuesday, March 22, Economy Minister Vahan Kerobyan announced measures to ease import restrictions on supplies as well as an agreement with other member-states of the Eurasian Economic Union to drop customs duties altogether on a wide range of goods. He also suggested that ongoing Western sanctions on Russia could provide Armenian manufacturers with new opportunities, but warned “expect an increase of exports to Russia, but a drop in profitability.”

The ruble’s spectacular collapse is expected to reverberate in Armenia, too, since remittances from workers in Russia bring in an estimated $549 million annually into the country, though this is usually in rubles. But the ruble’s devaluation may also hurt Armenian exports as Armenian products would face fierce local competition.

Either way, the government has welcomed the influx of new Russians with open arms, partially in an attempt to balance the negative economic outcomes with a potential gain in productivity and economic performance which these highly skilled professionals offer.

The Economy Ministry has already developed a platform to help incoming Russian IT and business professionals fast track work-related paperwork and find them employment in the country’s burgeoning tech sector. Ironically, despite a history of chronic underemployment and low wages, recent economic growth — particularly in information technology — has created a skilled workforce shortage, which many employers are now eager to fill with these new arrivals. Some are even trying to lure new skilled workers outside of Yerevan, like American entrepreneur Todd Fabacher, who is building an entire new neighborhood in Armenia’s historic city of Gyumri to house tech workers at his IT services company Digital Pomegranate.

This hoped-for economic balancing effect is already being felt in Yerevan. Lena Seropyan, who works in one of the city’s trendier nightlife spots, said that every third customer she serves is Russian. “They often order more expensive cocktails on the menu too,” she added. Indeed, young Russians patrons can be seen lounging at cafes or enjoying meals at fashionable eateries around town.

Karen Margaryan, president of MBG hospitality group which operates several high-end restaurants in Armenia, welcomed this trend in a statement to the Mirror-Spectator. “Of course we’re happy with this flow of guests. This is the healthiest our industry has been since the war and COVID pandemic both hit in 2020.” He noted how his restaurants have started serving breakfast earlier to accommodate their Russian patrons’ working schedule.

Elena Kozhemyakina, a long-time Yerevan resident and herself an ethnic Russian, also said she hoped that these new arrivals will enrich Armenian society.

“I expect that at least part of them will stay and become part of this collaboration to bring in new ideas and perspectives, but of course, we also expect them to respect Armenian culture. We like our rhythm without any snobbery or imperialist mentality, so let them only pack useful habits in their suitcases” she said.

These newcomers arguably already are contributing to Armenian society. As the Armenian government continues skillfully avoiding entanglement in the ongoing war, young Russians have been participating in larger numbers in a series of grass-roots anti-war protests held in the Armenian capital. At a particularly large rally on Sunday, an exiled Russian journalist explained that she felt “the same kind of shame at what my country is doing now that Germans must have felt when faced with the consequences of their actions in the Second World War.” She, along with hundreds of other young Russians, marched down Yerevan’s main Mashtots Boulevard chanting “No War” and “Down with Putin.”

A demonstration in Yerevan against the war (Raffi Elliott photo)

For Armenians the prospect of taking a public stance on this ongoing conflict has been uncomfortable. Some have cited fear of provoking Russia upon which Armenia relies for security. Others remain reluctant to back a country whose government they perceive to have either tacitly or overtly sided with Azerbaijan during its 2020 invasion of Artsakh. Many feel betrayed by a world which ignored their plight while enthusiastically taking up the mantle of support for Ukraine.

Still, for the Armenians taking part in Sunday’s anti-war rally, the images of devastation of Ukrainian cities, hospitals and critical infrastructure by an authoritarian neighbor bent on rewriting history make for clear parallels with Artsakh. “Ukrainians are suffering today because the world left us to suffer in 2020” said Sonya Galstyan, one of the participants.

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