According to the government’s decision, the temporary restriction of communication with Iran will be extended until March 24, which will also apply to vehicles carrying cargo. Georgia‘s re-export of fruits and vegetables of Iranian origin to Russia through the territory of Georgia has been temporarily stopped.
In its analysis of the situation at the border as a result of the coronavirus, the UNSC writes:
“In terms of export and import, we should note that in 2019, the trade turnover between Iran and Armenia amounted to 408.8 million USD, which recorded a 12.4% increase compared to 2018. The trade turnover of goods between the two countries in 2019 was only 5% of the trade turnover of Armenia. In 2019, Armenia mainly exported electricity to Iran (75% of export volumes) and fresh meat of sheep or goats (10%). In the case of imports, mainly natural and liquefied gas (20% of import volumes), oil and oil products (10%), cement (8%). The restriction of cargo transportation until March 24, 2020 will not have a significant impact on Armenia’s economy, and the restriction of passenger transportation through the tourism sector will affect a number of sectors of our economy, such as accommodation and public catering, etc., which may slow down the rate of economic growth.
As for the ban on transporting fruits and vegetables of Iranian origin through the territory of Georgia, if these products are not re-exported to Russia, they will be sold in the Armenian market, causing competition between local and Iranian products. The consumer of Armenia, if given a choice, can choose a cheaper product, which will lead to a reduction in the income of rural households.
Thus, the restriction on cargo transportation with Iran will not have a significant impact on Armenia’s economy, passenger transportation will slow down the rate of economic growth, especially in the first quarter of 2020, and the embargo on goods of Iranian origin through the territory of Georgia will lead to a decrease in prices on the market of Armenian agricultural products and a reduction in the income of rural households. “.
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