The ghost of Soviet-era brands in Armenia

The president of the Union of Local Manufacturers highlights the importance of resuming the Soviet-era industries in Armenia before the country becomes a member of the Russian-led Customs Union.

Speaking to Tert.am, Vazgan Safaryan said he expects the one-time Soviet-Armenian footwear, machine-tool and machine building industries to have a big demand on the Eurasian Customs area.

Shoe fabrics (Masis, Luxe), machine-tool industries

Safaryan said he doesn’t think the scenario is a myth against the background of the “Armenian molybdenum” and apricot. “I say what really happened. People from Paris would purchase and bring knitted fabric manufactured in Spitak [Lori region]. Armenia’s industries accounted for 66%-67% of our GDP. Today however, they near 20%,” he noted.

As for the machine-tool engineering, Safaryan said its share in the GDP used to be 20%. “In what you call a closed country, the plant Armenmotor, which was formerly called Electric Engine Plant, sent its engines to 90 countries. Those engines were exported to Japan. People would form queues in Moscow for our shoes,” he added.

But the economic management model Armenia has today is completely different, with the Government realizing the importance of cooperation with the private sector, Khachatryan said.

“That we didn’t have; it’s a new function. [The Government] spent 801 million Drams [approx. $2,000] from the budget last year to boost the export with 3% subsidies. We now offer loans with an 8% interest rate to those who export [products],” he said, stressing the importance of raising the competitiveness of local goods.

Safaryan said the higher interest rates to be imposed on the Customs Union member states for third country imports are based on the Soviet-time ideology of encouraging the local manufacturing.

Asked whether it implies a return to the former USSR model, Safaryan ruled out such a possibility. “We do not speak of the former USSR model; we speak of new integration ties.”

On local manufacturing and distinctive features of Armenian products

Safaryan stressed the importance of eliminating the negative balance in foreign trade (which he said is $2.9 million).

“We have set a task not to bring goods that can be produced here. The promotion of local goods is one of the best factors of our CU integration. We will not bring the products which we can manufacture locally; sugar, for instance,” he said.

Turners welders and carpenters will be trained in Armenia

The Customs Union has submitted a bid to the Armenian Government, expressing its willingness to assist in the training of the manufacturing workforce (turners, welders and carpenters).