Armenia’s lower trade turnover due to weak domestic market - opinions

Armenia’s lower trade turnover with the former Soviet republics is the result of passive economic policies and the domestic market’s lower solvency, according to opposition lawmakers.

Mikael Melkumyan, an economist affiliated with the Prosperous Armenia parliamentary faction, says he is especially concerned about the reduced demand for solvent consumers. “Though the salaries [in the public sector] have increased since July 1, the trade volumes won’t grow. These are problems that raise major concerns,” he told Tert.am.

Reports in the local press said earlier today that Armenia’s trade turnover with the ex-Soviet countries has decreased in all sectors, with the export and import volumes being down by 9% and 3.1%, respectively. The same reports also hinted at a lower turnover with EU member states (7% in exports and 0.2% in imports).

It was further found that Armenia’s exports to the Russian Federation had seen a considerable decline. “Russia ranks as the first as a target country of our exports; as for the declining trends, I link that with our general economic passiveness,” Melkumyan said, commenting on the figures.

Asked whether the prospect of Eurasian integration inspires positive hopes at all, the economist did not give an unequivocal reply. “I see problems there too; nothing is likely to change, a least until January 1, 2015. As to whether or not it will be positive, that depends on the conditions. We have 800-900 sensitive products we don’t know what to do with,” the opposition MP added.

He further pointed out to inevitable difficulties with the World Trade Organization (as increased customs duties may complicate the third country import). “I do not see those problems resolved as of now,” he noted.

Armen Martirosyan of the opposition Heritage faction in parliament cited the domestic situation and the current developments on the post-Soviet area as the reasons behind the reduced turnover. “So we obviously have to develop the European trend, given especially that it was dynamically developing before [scrapping] the Association Agreement. Secondly, Armenia is facing an economic downfall, whether we want it or not, as well as a population decline which also reduces the production capacities,” he noted.

Martirosyan said he doesn’t think that locally manufactured goods can be competitive across the Commonwealth of Independent States where the demand for quality products is high.

Considering the government’s promises about the positive outcomes of the Eurasian integration as just a fairytale, the opposition MP said he believes that the authorities are in this way trying to invent good stories about a bright future. “But the reality is obvious to us all. While economists were skeptical about it in the past, they are now sure that it won’t yield a positive result. We no longer receive a kind treatment by Europeans, so they may have diminished the interest in our products,” he added.