Russia's food import ban offers both challenges and opportunities to Armenia – opinions

The Russian Government’s decision to ban the import of agricultural products from the West (including US, Canada and 28 EU member states) creates a little force majeure for Armenia, but on the other hand, it is thought to be a good opportunity for boosting the domestic exports.

Speaking to Tert.am, President of the Republican Employers' Union Gagik Makaryan said he thinks that the vast Russian market, which is opening to the country thanks to the integration into the Eurasian Economic Union (EaEU), offers wide advantages in terms realizing locally manufactured wine, preserved food and juices.

“If the country restricts [the import of] different products, especially food, Russia will have two options: it will either have to boost the import of goods from countries which are its friends – and Armenia is one of them – or make investments in its economy and agriculture or else ask the government to issue subsidies. I think the first model is more realistic. And in this case, I think, Belarus will be the country to rapidly fill [the gap], as it has a powerful economy. The next option is that Russia can import many things from Armenia and, why not, from Azerbaijan, because it has sanctions against Georgia,” he said, elaborating on the situation.

In such circumstances, Armenia has two choices: either to propose that the Russian government make investments in the domestic economy to boost the local manufacturing or to lend a helping hand to the local agricultural businesses.

“Our reprocessing factories use 50 or 20 percent of their capacities today, as such markets never remain free for a long time,” Makaryan added.

According to him, the existing situation is a good opportunity to three times increase the local manufacturing.

The Russian ban applies to meat products, dairy, fruits and vegetables.

Hayk Gevorgyan, a commentator of the local daily Haykakan Zhamanak, said he expects the decision to cause food security problems on the Armenian market. He said ban is more likely to have a direct rather than an indirect impact on Armenia.

“We will face [constraints] under any circumstances, because Russia was normally the first to import [goods], whereas we used to import them from Russia. We will have problems here, but if our businessman can find other sources of import ... As for Russia’s general economic situation, it’s another matter which doesn’t smell good to me today. That will cause a decrease in transfers; the Russian investments in Armenia’s economy will drop,” Gevorgyan told Tert.am, describing the situation as very shaky.

The expert forecast made after the 2008 Russian-Georgian war demonstrated that the Armenian importers do not have serious potentials of preserving food to ensure the import of the necessary quantity of food products.

The Russian Government on Thursday approved Armenia’s EaEU accession treaty which earlier  had been posted on its official website. Asked whether Armenia will incur the impact of the Western sanctions after acceding to the Russia-led bloc, Gevorgyan noted that Belarus and Kazakhstan, which are the founding member states of the Union, are neither involved in the sanctions nor face any impact at all.

Khosrov Harutyunyan, a former prime minister who now represents the ruling Republican faction in Armenia’s National Assembly, said he is of the opinion that Russia now needs to secure imports from other states, a move which is thought to be highly likely to cause a surge on the country's market.

“Russia therefore has to think about creating more favorable conditions for the Customs Union member states to increase the imports from them. But I am not sure that we export beef (we rather import it) or dairy,” he noted.

Harutyunyan said he doesn’t think that the situation will essentially influence Armenia, adding that its long-lasting effect may even offer advantages to the local manufacturers.

But the former premier expressed belief that the Russian sanctions will not be long-lasting. “These are mutual shootings, as they say. So the sides will probably have to revise their own approaches after some time to reach mutually advantageous solutions. The Russian market is big, so I don’t think losing it will be without any consequences at all,” he added.