Times of Oman, Sultanate of Oman
Oct 11 2009

Armenians see crucial economic boost from Turkey ties

YEREVAN: Like many business owners in Yerevan, Artur Afrikian is
salivating over the prospects for ArmeniaâEUR(TM)s struggling economy
as his country and Turkey move to normalise ties and open their
border.
"This is going to be very good for us," said Afrikian, who runs a shop
selling Turkish-made suits and shirts in Yerevan s sprawling Hrazdan
market. "It will be cheaper for me to bring goods from Turkey and, who
knows, maybe they will even open some factories here."

Armenia and Turkey on Saturday signed landmark pacts to normalize ties
after decades of bitterness rooted in World War I-era mass killings of
Armenians under Ottoman rule.
The two protocols signed will establish diplomatic ties and develop
bilateral relations, provided the two countries respective parliaments
ratify them. According to the protocols, the sealed Armenian-Turkish
border is to open two months following their ratification.
Economists predict that opening the border will give a huge boost to
the Armenian economy, which has badly suffered from the
countryâEUR(TM)s long isolation and has been among those hardest hit
by the global economic crisis.
Turkey closed the border in 1993 in solidarity with ally Azerbaijan
over Yerevan s backing of ethnic Armenian separatists in the disputed
Nagorny Karabakh region. The border with Azerbaijan is also closed.
With only its borders with Georgia and Iran open, landlocked Armenia
has struggled to join the world economy and depends significantly on
remittances from Armenians working abroad, especially in Russia.
As remittances have fallen amid the global economic downturn,
ArmeniaâEUR(TM)s economy contracted by 18.5 percent in the first eight
months of this year, according to the International Monetary Fund.
The IMF s country director in Armenia, Nienke Oomes, said the opening
of the border will not only lower import costs for Armenia, but give
the country access to vast new markets for its goods.
"In the short run it s possible that some Armenian companies will
suffer from the increased competition, but we believe that in the
medium and long term it s definitely going to be beneficial,âEUR she
said.
She said the IMF expects that transportation costs for exporting
Armenian goods will decrease by 10-20 percent after the border opens,
making Armenian companies more competitive internationally and giving
a major boost to trade.
"The whole eastern part of Turkey which borders Armenia — there are
about 15 million people living there and this could be a huge market
for Armenians to export goods," she said.
In 2008, according to Armenia s statistical service, less than two
million dollars worth of Armenian goods were exported to Turkey,
against 268 million dollars worth of Turkish goods imported to
Armenia, mostly through neighbouring Georgia.
Martin Sarkisian, the head of Armenia s Chamber of Commerce and
Industry, said he expects the amount of Armenian exports to grow
exponentially after the border opens, and not only to Turkey.
"Opening the border will open up the world to Armenia and promote
transportation and tourism. Armenia could even become a transit
country for our neighbours," he said.
Some opponents of opening the border have raised concerns that local
businesses will go under as cheaper Turkish goods flood the market,
but Sarkisian dismissed those fears.
"Many people say that Armenian manufacturers cannot compete with their
Turkish counterparts. But we should not be afraid of competition; on
the contrary, this will force manufacturers to raise the quality of
Armenian goods and reduce prices," he said.
At his clothing shop in Yerevan, Afrikian said that after his most
difficult business year ever, he can hardly wait for the border to
open.
"It s been a terrible year, nobody has any money and those who are
shopping are buying only the cheapest things," he said. "We need to
open the border. Things couldn t get any worse."