World economic crisis impacts on South Caucasus

Dennis Sammut, Executive Director of the British organization LINKS, believes the current world economic crisis is the most severe for the last 17 years. The tendency of globalization and the interrelation of national economies has resulted in the crisis affecting all continents in a very short period of time.

Sammut says that in 2009 the global economic crisis will seriously impact on the economies of the South Caucasus countries. Real estate prices will go down, investments will decrease and money transfers from foreign countries will also slow down. The rate of economic development will also decrease. Sammut warned the governments of the South Caucasus countries to be ready to elaborate flexible policies to resist the various pressures of the crisis and emerge with minimal losses.

Regarding Azerbaijan, the Executive Director thinks that much of the Azeri performance depends on the general situation in the energy market, so the country should be very careful in its expenditure of the money gained from energy transit. Additional measures should be taken by all three South Caucasus countries to take care of the most vulnerable members of their populations, because social and economic problems could easily become political problems.