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ARMENIA WILL BENEFIT ECONOMICALLY FROM JOINING CUSTOMS UNION: EXPERTS SAY
YEREVAN, September 11. / ARKA /. Armenia will benefit economically from
joining the Customs Union of Russia, Belarus and Kazakhstan, concluded
a team of Armenian experts who studied this issue for several months.
Presenting the findings of their study to a news conference today, a
team member, Aram Safarian, who is head of an NGO called Integration
and Development, said the study was initiated by the Eurasian
Development Bank 'to clarify the prospects and possibilities of
the Eurasian integration.' Ashot Tavadyan, the leader of the team,
said President Serzh Sargsyan's decision to join the Customs Union
was not a surprise to experts.
"Back in 2011, heads of CIS countries signed in Russian St. Petersburg
the agreement on free trade zone, which Armenian parliament ratified
unanimously in 2012 September. President Sargsyan's announcement was
a logical continuation of this process," Tavadyan said.
According to him, the accession agreement includes issues of economic
security and cover key areas such as energy and transport and provides
for unprecedented investments in the Armenian economy which will
boost its employment.
"The transport component (of the agreement) implies a $470
million investment in upgrading Armenia's railways. This is a
direct investment. For us it is very important to have additional
communication facilities. The EU would not do it, given its strained
relations with Iran," said Tavadyan.
According to him, the Eurasian Development Bank has already pledged
to invest about $100 million in Armenia, which will increase the
economic expansion rate by 0.4 %.
The second most important component, he said, is energy; namely,
continued operation of the Armenian nuclear power plant and
construction of a new facility to replace it, as well as 'automatic'
reduction in gas prices by 30 % (from $270 to about 1$80 per one
thousand cubic meters) after Armenia's formal accession to the Customs
Union. He said the price cut is expected to increase the GDP by about
1 %. In addition, the membership will also secure Armenia lower prices
of oil products.
"The third component is production: more precisely, resumption
of Nairit chemical plant and construction of an oil pipeline,"
Tavadyan said.
There is also the fourth component that will contribute a 0.25 percent
increase to economic growth- it is migration.
"Russia will ease procedures for Armenian labor migrants, eliminate
administrative obstacles which will result in increased money
remittances to Armenia," he said.
He argued that Armenia's accession to the Customs Union will translate
in a short-term perspective into a 4 percent GDP growth.
Speaking about absence of common borders with a Customs Union member
country, Tavadyan noted this will be offset by cheaper energy products.
"From the economic point of view, we are winning. Life will improve
and become safer with increasing GDP," said Tavadyan.
He then added that the membership will not affect Armenia's exports
to EU because they are mainly raw materials.
Speaking of the prospects of European economic integration, Tavadyan
said that it promises Armenia 2.3 % rise in GDP in the long term,
without considering the risks.
These risks are problems with Turkey, excessive dependence on raw
materials and corruption. "But corruption is the problem that we must
ourselves address it." The most serious risk in his opinion, given
Armenia's European integration, would be Russia-imposed restrictions
that would zero out all growth forecasts,' he said. -0- - See more at:
http://arka.am/en/news/economy/armenia_will_benefit_economically_from_joining_cus toms_union_experts_say/#sthash.KTMPDKp7.dpuf
YEREVAN, September 11. / ARKA /. Armenia will benefit economically from
joining the Customs Union of Russia, Belarus and Kazakhstan, concluded
a team of Armenian experts who studied this issue for several months.
Presenting the findings of their study to a news conference today, a
team member, Aram Safarian, who is head of an NGO called Integration
and Development, said the study was initiated by the Eurasian
Development Bank 'to clarify the prospects and possibilities of
the Eurasian integration.' Ashot Tavadyan, the leader of the team,
said President Serzh Sargsyan's decision to join the Customs Union
was not a surprise to experts.
"Back in 2011, heads of CIS countries signed in Russian St. Petersburg
the agreement on free trade zone, which Armenian parliament ratified
unanimously in 2012 September. President Sargsyan's announcement was
a logical continuation of this process," Tavadyan said.
According to him, the accession agreement includes issues of economic
security and cover key areas such as energy and transport and provides
for unprecedented investments in the Armenian economy which will
boost its employment.
"The transport component (of the agreement) implies a $470
million investment in upgrading Armenia's railways. This is a
direct investment. For us it is very important to have additional
communication facilities. The EU would not do it, given its strained
relations with Iran," said Tavadyan.
According to him, the Eurasian Development Bank has already pledged
to invest about $100 million in Armenia, which will increase the
economic expansion rate by 0.4 %.
The second most important component, he said, is energy; namely,
continued operation of the Armenian nuclear power plant and
construction of a new facility to replace it, as well as 'automatic'
reduction in gas prices by 30 % (from $270 to about 1$80 per one
thousand cubic meters) after Armenia's formal accession to the Customs
Union. He said the price cut is expected to increase the GDP by about
1 %. In addition, the membership will also secure Armenia lower prices
of oil products.
"The third component is production: more precisely, resumption
of Nairit chemical plant and construction of an oil pipeline,"
Tavadyan said.
There is also the fourth component that will contribute a 0.25 percent
increase to economic growth- it is migration.
"Russia will ease procedures for Armenian labor migrants, eliminate
administrative obstacles which will result in increased money
remittances to Armenia," he said.
He argued that Armenia's accession to the Customs Union will translate
in a short-term perspective into a 4 percent GDP growth.
Speaking about absence of common borders with a Customs Union member
country, Tavadyan noted this will be offset by cheaper energy products.
"From the economic point of view, we are winning. Life will improve
and become safer with increasing GDP," said Tavadyan.
He then added that the membership will not affect Armenia's exports
to EU because they are mainly raw materials.
Speaking of the prospects of European economic integration, Tavadyan
said that it promises Armenia 2.3 % rise in GDP in the long term,
without considering the risks.
These risks are problems with Turkey, excessive dependence on raw
materials and corruption. "But corruption is the problem that we must
ourselves address it." The most serious risk in his opinion, given
Armenia's European integration, would be Russia-imposed restrictions
that would zero out all growth forecasts,' he said. -0- - See more at:
http://arka.am/en/news/economy/armenia_will_benefit_economically_from_joining_cus toms_union_experts_say/#sthash.KTMPDKp7.dpuf