Capital follows the path of least resistance, and, as they say, “all roads lead to Rome”, in our case, the Russian Federation. Economist Atom Margaryan said in a conversation with Aysor.am, referring to the sharp increase in the volume of Russian trade with Armenia.
“The Russian Federation is one of the largest investors in the Republic of Armenia, let’s not forget that 60-70% of the infrastructure is owned by Russian companies or the state. When there is a mass total attack in the public perception today, one must definitely remember the history: what trajectory was formed in terms of the infrastructures of the two countries, how the energy system, communication system, infrastructures, railway, logistics systems, gas distribution network of RA were privatized. And they have decades of history and, of course, these systems work, not to mention the important enterprises transferred to the Russian Federation in exchange for debt. In addition to that, the volumes of business turnover, private transfers from Russia,” he said.
The economist reminded that RA continues to be a member country of EAEU, and instead, trade flows and investments with the EU are, in fact, going towards reduction, taking into account the fact of leaving the GSP+ preferential system.
Atom Margaryan noted: “Today, the world is a globally manageable chaos, and the existing customs realities cannot be ignored, whatever the orientations towards the European markets, the desires for reorientation. Europe, at least today, is in a shameful state, related to the deficit of energy carriers, the financing of the Ukrainian war, human capital, restrictions on the flow of technology. The EU has become a derivative factor from the USA. So, it’s normal, I’m not surprised by the growth figures, no matter how much the politicians and governments, both in RA and in Russia, play some games, this is the reality and we can’t get out of this framework.” he said.
Atom Margaryan responded that what is the reason for the 85% increase in exports from Armenia to Russia, which is 51% of the total volume of exports, does Armenia have such a production potential. “No, there is no product, it’s the same, one more thing has decreased. There is no growth comparable to GDP growth in industry. The same problem exists in agriculture. The growth of these exports in the last 1.5 years is due to the factor of re-exports. Armenia has turned into a pipe through which goods from third countries enter Armenia, or are rebranded, or simply re-exported,” he said and noted that the sanctions against Russia work in a sense in favor of Armenia.
“However, the sanctions can have a boomerang effect, because there are groups of products under sanctions, which are closely followed by the countries that have imposed sanctions on Russia, and there are already certain examples that some businessmen have fallen under the target of possible sanctions, in particular, smartphones, electronics other products, in terms of re-export of high-tech products,” he said, stressing that the growth figures are deceptive.
“Today, if we hypothetically imagine that the war in Ukraine stops or there is a ceasefire, our economy will immediately be in a deplorable state, because these growths are based on construction, trade and service sectors. “The real sector, the jobs are in a very difficult situation, due to the consequences of the devaluation of the ruble, and the ruble has depreciated by 60-70 percent in this year and a half, and it has hit the exports of the real sector,” he said.
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