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ARMENIA: YEREVAN MENDING FENCES WITH EU
EurasiaNet.org
Feb 9 2015
February 9, 2015 - 11:13am, by Gayane Abrahamyan
With the Russian economy hitting the skids, it looks like Armenia
wants to hedge its economic bets. Although Yerevan became a member of
the Russia-led Eurasian Economic Union in January, a senior Armenian
government official told EurasiaNet.org that the country is working
to complete an updated version of an EU Association Agreement that
Armenian officials put on hold back in 2013.
Balancing trade and other commitments inherent in EEU membership along
with those involved with an EU association agreement appear, at least
on paper, to be problematic. But that isn't deterring Yerevan. A need
for money seems to be the main motivation. With Russia, Armenia's
main economic partner, suffering the effects of both low oil prices
and Western sanctions, Armenia saw its remittances from guest workers
abroad fall by 39 percent in 2014, and exports sag by 18 percent,
according to the National Statistical Service. And so far, the expected
economic benefits of joining the EEU have not materialized.
Simplified export-import procedures are not in effect yet, while
import duties have been raised on over 7,000 products.
Many Armenians had hoped Western sanctions against Russia would cause
trade volume from Armenia to Russia to rise. Yet Armenian exports
ended up dropping by 8.9 percent in 2014 compared to 2013. Russia's
ITAR-TASS news agency, however, claims the exact opposite - an alleged
increase of 3.2 percent to $1.5 billion.
Armenian entrepreneurs have not noticed any positive change. "The
EEU is, by far, not paradise," remarked Raffi Mkhchian, head of
Armenia's Exporters' Union. "Everything is vague; maybe later things
will get normalized."
To justify joining the EEU, Armenian leaders had cited
strategic reasons, especially a need for a stronger deterrent
against Azerbaijan. But 2014 has seen the most bloodshed in the
Nagorno-Karabakh contact zone since the 1996 signing of the ceasefire
agreement. Ten Armenian soldiers and two civilians were killed during
the first month of 2015 alone.
Political analyst Aghasi Yenokian, head of the Armenian Center
for Political and International Studies, characterized the EEU as
"half dead." And given that the EEU shows no signs anytime soon of
fulfilling its initial promise, Yanokian said "it is important to
have an alternative -- at least in perspective."
Enter the EU, which, in November, pledged to provide Armenia with up
to 170 million euros ($192.48 million) through 2017 for encouraging a
variety of reforms, in particular in the justice sector. In a separate
package, the EU handed over 77.5 million euros (over $87.7 million)
in January for agricultural, anticorruption and civil-service reform
projects.
Armenian Prime Minister Hovik Abrahamian stated on January 16 that
such cooperation is "of fundamental importance" for bolstering the
Armenian economy. Several days later, at a meeting of officials
working on forms of cooperation with the EU, word emerged that
"renewed cooperation steps" were under discussion.
First Deputy Economy Minister Garegin Melkonian called talks with the
EU "productive" and underlined that "active steps are being taken"
to formalize Armenia's cooperation with the EU. The aim, he said,
is to hold onto the free-trade and other economic provisions from
the 2013 Association Agreement, while "amending the points that are
subject to change due to the EEU commitments."
Armenia already exports more goods to the EU than to fellow EEU-members
Russia, Kazakhstan and Belarus, according to the State Statistical
Service.
Some observers say Armenia's re-engagement of the EU doesn't mean
Yerevan is maneuvering to abandon Moscow any time soon. Political
analyst Stepan Safarian, a former opposition MP, believes that
officials' interest in the EU is "limited mainly to getting funds
from the EU; meaning that these steps to maintain cooperation are
mostly taken to not lose that support." As yet, Russian officials have
not responded to Yerevan's latest EU overture. Whether that changes
"depends on the seriousness of the upcoming [EU association] document,"
Safarian said.
At the same time, Safarian believes that rising tension over Karabakh
has prompted Armenian officials to acquire "a deeper understanding
of the value of an alternative" to the EEU.
Editor's note: Gayane Abrahamyan is a freelance reporter and editor
in Yerevan.
http://www.eurasianet.org/node/71986
EurasiaNet.org
Feb 9 2015
February 9, 2015 - 11:13am, by Gayane Abrahamyan
With the Russian economy hitting the skids, it looks like Armenia
wants to hedge its economic bets. Although Yerevan became a member of
the Russia-led Eurasian Economic Union in January, a senior Armenian
government official told EurasiaNet.org that the country is working
to complete an updated version of an EU Association Agreement that
Armenian officials put on hold back in 2013.
Balancing trade and other commitments inherent in EEU membership along
with those involved with an EU association agreement appear, at least
on paper, to be problematic. But that isn't deterring Yerevan. A need
for money seems to be the main motivation. With Russia, Armenia's
main economic partner, suffering the effects of both low oil prices
and Western sanctions, Armenia saw its remittances from guest workers
abroad fall by 39 percent in 2014, and exports sag by 18 percent,
according to the National Statistical Service. And so far, the expected
economic benefits of joining the EEU have not materialized.
Simplified export-import procedures are not in effect yet, while
import duties have been raised on over 7,000 products.
Many Armenians had hoped Western sanctions against Russia would cause
trade volume from Armenia to Russia to rise. Yet Armenian exports
ended up dropping by 8.9 percent in 2014 compared to 2013. Russia's
ITAR-TASS news agency, however, claims the exact opposite - an alleged
increase of 3.2 percent to $1.5 billion.
Armenian entrepreneurs have not noticed any positive change. "The
EEU is, by far, not paradise," remarked Raffi Mkhchian, head of
Armenia's Exporters' Union. "Everything is vague; maybe later things
will get normalized."
To justify joining the EEU, Armenian leaders had cited
strategic reasons, especially a need for a stronger deterrent
against Azerbaijan. But 2014 has seen the most bloodshed in the
Nagorno-Karabakh contact zone since the 1996 signing of the ceasefire
agreement. Ten Armenian soldiers and two civilians were killed during
the first month of 2015 alone.
Political analyst Aghasi Yenokian, head of the Armenian Center
for Political and International Studies, characterized the EEU as
"half dead." And given that the EEU shows no signs anytime soon of
fulfilling its initial promise, Yanokian said "it is important to
have an alternative -- at least in perspective."
Enter the EU, which, in November, pledged to provide Armenia with up
to 170 million euros ($192.48 million) through 2017 for encouraging a
variety of reforms, in particular in the justice sector. In a separate
package, the EU handed over 77.5 million euros (over $87.7 million)
in January for agricultural, anticorruption and civil-service reform
projects.
Armenian Prime Minister Hovik Abrahamian stated on January 16 that
such cooperation is "of fundamental importance" for bolstering the
Armenian economy. Several days later, at a meeting of officials
working on forms of cooperation with the EU, word emerged that
"renewed cooperation steps" were under discussion.
First Deputy Economy Minister Garegin Melkonian called talks with the
EU "productive" and underlined that "active steps are being taken"
to formalize Armenia's cooperation with the EU. The aim, he said,
is to hold onto the free-trade and other economic provisions from
the 2013 Association Agreement, while "amending the points that are
subject to change due to the EEU commitments."
Armenia already exports more goods to the EU than to fellow EEU-members
Russia, Kazakhstan and Belarus, according to the State Statistical
Service.
Some observers say Armenia's re-engagement of the EU doesn't mean
Yerevan is maneuvering to abandon Moscow any time soon. Political
analyst Stepan Safarian, a former opposition MP, believes that
officials' interest in the EU is "limited mainly to getting funds
from the EU; meaning that these steps to maintain cooperation are
mostly taken to not lose that support." As yet, Russian officials have
not responded to Yerevan's latest EU overture. Whether that changes
"depends on the seriousness of the upcoming [EU association] document,"
Safarian said.
At the same time, Safarian believes that rising tension over Karabakh
has prompted Armenian officials to acquire "a deeper understanding
of the value of an alternative" to the EEU.
Editor's note: Gayane Abrahamyan is a freelance reporter and editor
in Yerevan.
http://www.eurasianet.org/node/71986