The National, UAE
April 24 2010

Armenia looks to build Gulf ties

by Tamsin Carlisle

Last Updated: April 24. 2010 9:15PM UAE / April 24. 2010 5:15PM GMT
YEREVAN // Armenia, a largely Christian country, is seeking to deepen
business ties with Muslim states, including its most significant
Gulf-region trade partner, the UAE.

The Eurasian republic has historically had warm relations with most
Arab states, several of which took in the Armenian refugees who fled
Ottoman Turkey during the First World War. But most of the trade has
been one-way.

`Traditionally, there has been a large amount of imports from the UAE
to Armenia,’ said Armen Kevorkian, the Armenian deputy prime minister.
`We want to change that situation. We want to bolster the economic
content of the relationship.’

The UAE has been a uniquely important trade partner for Armenia
because it has been able to provide the shipment of goods to the
landlocked republic from the rest of the world.

At times, that has been a lifeline for the Armenian economy, which
since 1993 has been hamstrung by the closure of its two longest land
borders, with Turkey and Azerbaijan, in a long-running spat over the
Nagorno-Karabakh region. In addition, the transport of goods to
Armenia through its northern neighbour Georgia has been unreliable
because of Georgia’s unstable relationship with Russia.

For overland transit to Armenia, that leaves only the southern route
through Iran, with which it is at pains to maintain excellent
relations.

The most important intermediary for the route has been the emirate of
Dubai, a major transshipment and re-export centre for goods from
around the world.

Products bound for Armenia, from machinery to paper, are shipped from
the Jebel Ali container port across the Gulf to the Iranian port of
Bandar Abbas, from where lorries carry them onwards.

Now the Armenian government is proposing to ship a range of local
products, including high-quality fresh fruits and vegetables and
building materials, south to the Emirates.

It also hopes for more direct foreign investment from the UAE and
eventually to bid on consulting and services contracts there in
sectors including telecommunications and energy.

Officials including Mr Kevorkian and Nerses Yeritsyan, the Armenian
minister of economy, suggest the Emirates could benefit from Armenian
know-how in physical and computer sciences, including nuclear and
information technology.

`This country used to be the Silicon Valley of the Soviet Union. We
designed and built computers and we were a country with particle
reactors,’ said Mr Yeritsyan.

The world’s best-designed computer chips were developed in Armenia, he
asserted, which has attracted international technology companies to
the country to set up research and development laboratories.

According to Mr Yeritsyan, Armenia also has sophisticated engineering
capabilities, especially in IT, which has led the government to target
building the world’s best internet and broadband network.

Armenian companies already provide consulting, design and software
services to international businesses, especially in the energy,
defence and aerospace sectors, he said.

`Currently, we have between 5,000 and 7,000 IT engineers. The target
for the next 10 years is to double our IT labour force and to attract
high-tech companies to Armenia. The government is intervening at the
level of entrepreneurial support,’ Mr Yeritsyan said.

`We have 15,000 engineering students who are excellent in theoretical
training. They only lack a US$5 million (Dh18.36m) to $7m laboratory
for practical experience. [As an investment], that would be nothing
for a country like the UAE.

`We believe that in 10 to 15 years, this country could become the
knowledge laboratory of the world.’

Mr Kevorkian points to nuclear energy as another prime area in which
the UAE could benefit from Armenian input. Armenians have decades of
experience with operating and maintaining the Russian-designed nuclear
plant installed in their country in 1976 and even with decomissioning
the plant and restarting it.

It has also been suggested that Armenia could also help the UAE in
accessing Russian markets, since it has had warm relations with Russia
since the break-up of the Soviet Union and is comfortable with Russian
culture.

Annual trade between Armenia and the UAE peaked at $500m in 2008, but
sank to $300m last year during the recession. Mr Yeritsyan expects the
2008 figure soon to be surpassed.