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    Categories: 2017

Armenia in the Eurasian Economic Union and disappointed citizens

Netgazeti , Georgia,
28 Aug 17


Armenia in the Eurasian Economic Union and disappointed citizens

Armine Avetisyan
[Armenian News note: the below is  translated from Georgian]

Two years have passed since Armenia joined the [Russian-led] Eurasian
Economic Union [EEU]. What benefits has our country gained from the
membership in the union and which expectations have our citizens
fallen short of?

Government notes Armenia's achievements as EEU member

To discuss the issue, a round table was even held in Armenia, where
Armenian Deputy Prime Minister and International Economic Integration
and Reforms Minister Vache Gabrielyan said that over the past two
years, Armenia's resources had increased and prices on imported goods
had decreased. Armenian Economic Development and Investment Mistier
Suren Karayan said that as a result of two years of Armenia's
membership in the EEU, trade turnover of the aforementioned
organisation's member states was increasing every year. He presented
the data of 2016.

According to the EEU data, in 2016, Armenia's exports to the EEU
countries increased by 53 per cent, making Armenia the leader
according to the production growth rate.

Independent experts disagree

However, independent experts insist that the true picture is
different. In 2015, when Armenia joined the EEU, economic growth
decreased by 3 per cent and it was only the country's national debt
that increased.

In 2014, the national debt amounted to 4.4bn dollars. In 2015 and
2016, it amounted to 5.08bn and 5.8bn. According to forecasts for
2017, the national debt is going to amount to 6.3bn dollars and make
54 per cent of the GDP.

"Becoming a member of the EEU was a political step, not economic. From
the economic point of view, the organisation proper is at the forming
stage and it is too early to speak about achievements. Before joining
the organisation, its member states did not even try to unite or take
joint efforts. They have made no such attempts after joining it,
either. This was just Russia's attempt to restore the former Soviet
Union, gathering former Soviet countries around it, no more, no less,"
economist Mesrop Arakelyan told the Netgazeti [website].

In his opinion, compared to 2016, relatively dynamic processes have
been noticeable in the Armenian economy anyway.

"In 2016, the war delivered a severe blow to the Armenian economy. The
damage caused by Azerbaijan was really substantial and it ruined [the
Armenian economy]. Our economy has just begun to revive. Indeed,
compared to 2016, 2017 has been much more positive from this point of
view. However, compared to previous years, we are still in a dire
situation."

Expert explains difference between EEU, EU

According to Arakelyan, any union, be it Eurasian or European, should
be organised in such a way that its member states should
unconditionally cooperate in the sphere of foreign trade. This
cooperation will make it possible to speak about economic growth. The
EU ensures connections of the kind. However, I cannot say the same
about the EEU.

"Sixty per cent of the foreign trade of European countries is
conducted within the EU. Due to close relations, they can import local
products to neighbouring countries, conducting trade and sales there.
In the EEU, this showing does not exceed 25 per cent. This implies
that we cannot sell our products to the EEU member states. However, we
can conduct trade in third countries."

EEU not to be blamed - economist

According to economist Babken Tunyan, low economic showings are not
linked to Armenia's membership in the EEU and they have nothing to do
with this.

"We are witnesses of a paradoxical phenomenon. When Armenia's economic
showings are positive, public sector employees directly link this to
the EEU. When they are negative, they either make no comments on this
or make illogical statements. The same applies to the opposition. When
we get low figures, they link this to the EEU, and so forth. In actual
fact, our connection with the Russian market has deep roots. Economic
factors and the problems Russia is facing are our problems. Sanctions
imposed on Russia make an impact on us, too," Babken Tunyan said.

And if economists carry out a professional analysis of the situation,
citizens of Armenia speak about their experience:

Ordinary Armenians dissatisfied with EEU membership

"The EEU is the area of great opportunities. However, political games
do not allow us to gain benefits. It would be better if the union
could really work. However, our dreams have failed to come true,"
38-year-old citizen of Armenia Karine Harutyunyan said.

Karine lives in the settlement of Bagratashen [near the Georgian
border] [square brackets as published]. Bagratashen is one hour away
from Tbilisi and three hours away from Yerevan. For many years now,
local residents have been going shopping to the regions of
neighbouring Georgia, which are adjacent to the border. As Karine put
it, two years ago, when Armenia joined the EEU, she was sure that
Armenia would soon become economically strong.

"I have never strived for Europe. Similar to my friends, I said that I
preferred the EEU, as borders with its member states were nearer. I
thought that it would be easier to import or export goods. However, we
are still facing problems. At that time, they said that by entering
the EEU, we would be able to conduct trade with neighbouring Georgia.
However, at present, thousands of problems have emerged, causing
hindrances. Earlier, we used to go to [the Georgian village of]
Sadakhlo [near the Armenian border], to buy household products there
and bring in some [products] to sell here. This time, I was able to
bring only six water melons."

As from 1 July 2017, the new requirements introduced by the EEU
Commission came into force. According to them, without customs
formalities, only 5 kg of phytosanitary products can be imported to
the territory of the European [Eurasian] [square brackets as
published] Union. Such products are fruits and vegetables.

Those, who live near the Armenian-Georgian border and used to bring
products from Georgia for many years to run small businesses, say that
they now feel bewildered, facing major problems. The thing is that
they can no longer engage in trade, which was their only source of
income.

In protest, on 25 July, residents of Bagratashen staged a rally near
the [border] crossing point, temporarily blocking the road to Armenia
for trucks. By doing so, they tried to show their dissatisfaction.

In response to the protest, the customs service chose not to come out
to with the protesters. In their interview to Netgazeti, the agency
people said that they obeyed only the law. Members of the [local]
community are not the only people dissatisfied with [Armenia's]
membership in the EEU. In Yerevan, one can come across a lot of people
saying that membership of the union has not brought them any changes
for the better.

Alex Jidarian:
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