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CUSTOMS UNION LEADS NOWHERE
Interview with economist Ashot Yeghiazaryan
Mr. Yeghiazaryan, what is the aftermath of the statement of Armenia on
joining the Customs Union and in your opinion what factors influenced
this statement?
The statement made in Moscow gave a surprise to many of us. It
could be described as change of the track of the foreign policy. The
fact is that Armenia thus chooses a dependent path of development,
which supposes recession and an underdeveloped economy. Armenia had
a chance to integrate with the European family which is a union with
the highest level of development and a pole of political and economic
power. In other words, Armenia had a chance to climb to a higher step
of the world economy and international political relations. It stood
a chance to be a subject of international relations at a new level
and in a new capacity. Armenia had a chance to upgrade its security.
This decision is not in line with the interests of the Armenian people
and Armenia, it leads nowhere, and there may be further surprises. The
model of integration of post-Soviet states initiated by Russia is not
a classic model of integration. It cannot compare to the EU because it
is initially artificial and lacks all the formal and informal elements
of integration. It resembles the European colonial empire, the Roman
Empire. Russia is trying to extend its political and economic influence
over a space and is driven by its own interests. In this case, the
level of exploitation of Armenia neither decreased, nor increased.
It is possible that the authorities were lobbied by big companies. I
don't think that the Russian energy companies did not have a role in
this Eurasian integration model. Naturally, they are trying to expand
their markets in countries where they can have influence.
What awaits Armenia?
In fact, we could not predict what would happen on September 3.
Armenia will face big economic, political and security problems and
failures. Armenia will not do better in the nearest period. Armenia
will have a lot of issues because the country is deprived of the
possibility to make decisions. Others are going to make decisions for
us. It is not compatible with independence, besides it is dangerous,
full of uncertainty and risks. A lot will depend on the ongoing
processes in the region, as well as the U.S. stance, the stance
of European officials which may also be determined by global and
regional processes.
They say this step strengthens our security. In reality, Russia tried
to strengthen its security at the expense of Armenia, thus reducing
the level of security of Armenia.
What will the membership to the Customs Union bring and what would
DCFTA bring to Armenia?
The advocates of the Eurasian project say that their countries expand
their markets and boost the number of consumers. On the other hand,
there are studies. One of the World Bank surveys concluded that the
Eurasian initiative cannot boost technological development of its
member states. It supposes isolation and prevention of introduction
of modern technology. The economies of those countries will remain
as primitive as they are now. Armenia does not even have enough raw
materials to export. It is a social, political and demographic danger.
The Customs Union cannot promise any economic benefits, considering the
structure of Armenia's economy and the peculiarities of the Customs
Union member states. Armenia will only suffer losses. The Armenian
economy is more liberal, and foreign trade is also more liberal,
customs duties are lower. Armenia will be cut from the world market
and appear in the space of Russian influence. It will ruin the budget
revenues. Technical costs will increase because Armenia does not have
a shared border with these countries. In other words, Armenia will
be deprived of the small income which it gets due to integration with
the global economy.
Integration is first of all based on machinery industry. Russia
tried to give a boost to its machinery industry, signed bilateral
agreements with Ukraine, Kazakhstan, Tajikistan, Kyrgyzstan, Armenia
and Georgia, hoping to revive its machinery industry by means of
industrial cooperation and scientific cooperation but all the attempts
ended in failure. I don't think that these attempts will succeed,
economy will be revived, jobs will be created.
Instead, integration with the European Union would open up
opportunities for Armenia to enter into industrial cooperation.
Economy could be diversified, structure could be improved. If we
compare the two integration models, in countries with equal levels of
development trade is at the intra-industry level. It is north-south
integration. In this case, exchange will be at the inter-industry
level. Armenia does not have a lot to give to the member states of
the Customs Union so our welfare will be jeopardized.
I think all our approaches need to be reviewed. It turns out that
our business elite is hopeless.
Roza Hovhannisyan 20:50 19/09/2013 Story from Lragir.am News:
http://www.lragir.am/index/eng/0/interview/view/30927
Interview with economist Ashot Yeghiazaryan
Mr. Yeghiazaryan, what is the aftermath of the statement of Armenia on
joining the Customs Union and in your opinion what factors influenced
this statement?
The statement made in Moscow gave a surprise to many of us. It
could be described as change of the track of the foreign policy. The
fact is that Armenia thus chooses a dependent path of development,
which supposes recession and an underdeveloped economy. Armenia had
a chance to integrate with the European family which is a union with
the highest level of development and a pole of political and economic
power. In other words, Armenia had a chance to climb to a higher step
of the world economy and international political relations. It stood
a chance to be a subject of international relations at a new level
and in a new capacity. Armenia had a chance to upgrade its security.
This decision is not in line with the interests of the Armenian people
and Armenia, it leads nowhere, and there may be further surprises. The
model of integration of post-Soviet states initiated by Russia is not
a classic model of integration. It cannot compare to the EU because it
is initially artificial and lacks all the formal and informal elements
of integration. It resembles the European colonial empire, the Roman
Empire. Russia is trying to extend its political and economic influence
over a space and is driven by its own interests. In this case, the
level of exploitation of Armenia neither decreased, nor increased.
It is possible that the authorities were lobbied by big companies. I
don't think that the Russian energy companies did not have a role in
this Eurasian integration model. Naturally, they are trying to expand
their markets in countries where they can have influence.
What awaits Armenia?
In fact, we could not predict what would happen on September 3.
Armenia will face big economic, political and security problems and
failures. Armenia will not do better in the nearest period. Armenia
will have a lot of issues because the country is deprived of the
possibility to make decisions. Others are going to make decisions for
us. It is not compatible with independence, besides it is dangerous,
full of uncertainty and risks. A lot will depend on the ongoing
processes in the region, as well as the U.S. stance, the stance
of European officials which may also be determined by global and
regional processes.
They say this step strengthens our security. In reality, Russia tried
to strengthen its security at the expense of Armenia, thus reducing
the level of security of Armenia.
What will the membership to the Customs Union bring and what would
DCFTA bring to Armenia?
The advocates of the Eurasian project say that their countries expand
their markets and boost the number of consumers. On the other hand,
there are studies. One of the World Bank surveys concluded that the
Eurasian initiative cannot boost technological development of its
member states. It supposes isolation and prevention of introduction
of modern technology. The economies of those countries will remain
as primitive as they are now. Armenia does not even have enough raw
materials to export. It is a social, political and demographic danger.
The Customs Union cannot promise any economic benefits, considering the
structure of Armenia's economy and the peculiarities of the Customs
Union member states. Armenia will only suffer losses. The Armenian
economy is more liberal, and foreign trade is also more liberal,
customs duties are lower. Armenia will be cut from the world market
and appear in the space of Russian influence. It will ruin the budget
revenues. Technical costs will increase because Armenia does not have
a shared border with these countries. In other words, Armenia will
be deprived of the small income which it gets due to integration with
the global economy.
Integration is first of all based on machinery industry. Russia
tried to give a boost to its machinery industry, signed bilateral
agreements with Ukraine, Kazakhstan, Tajikistan, Kyrgyzstan, Armenia
and Georgia, hoping to revive its machinery industry by means of
industrial cooperation and scientific cooperation but all the attempts
ended in failure. I don't think that these attempts will succeed,
economy will be revived, jobs will be created.
Instead, integration with the European Union would open up
opportunities for Armenia to enter into industrial cooperation.
Economy could be diversified, structure could be improved. If we
compare the two integration models, in countries with equal levels of
development trade is at the intra-industry level. It is north-south
integration. In this case, exchange will be at the inter-industry
level. Armenia does not have a lot to give to the member states of
the Customs Union so our welfare will be jeopardized.
I think all our approaches need to be reviewed. It turns out that
our business elite is hopeless.
Roza Hovhannisyan 20:50 19/09/2013 Story from Lragir.am News:
http://www.lragir.am/index/eng/0/interview/view/30927