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Q&A: Opening Of Armenia -Turkey Border Or Improving The Domestic Eco

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  • Q&A: Opening Of Armenia -Turkey Border Or Improving The Domestic Eco

    Q&A: OPENING OF ARMENIA -TURKEY BORDER OR IMPROVING THE DOMESTIC ECONOMIC AND POLITICAL ENVIRONMENT
    Hayk Petrosyan

    The Civilitas Foundation
    Wednesday, 09 December 2009 10:58

    Dialogue

    In our previous poll, we asked which would be of greater benefit to
    Armenia's economy , opening of Armenia -Turkey border or Improving
    the domestic economic and political environment . Before proceeding
    to discussion of the poll results, a little bit about the poll itself.

    One of the respondents asked whether the choices contradict each
    another, or if it is not possible to implement both simultaneously.

    Certainly it is possible and even desirable. The question however was
    really the following: which of these two measures is more tangible,
    visible and in the long-run will have a positive influence on the
    economy of Armenia. In other words, what is the most direct way of
    solving economic problems: opening the Armenia-Turkey border by all
    means or directing our efforts to finding solutions to the internal
    systemic problems.

    The majority of our respondents, 88 percent, think that domestic
    reforms will have a better influence on the economy. Fourteen percent
    think that opening the border is a higher priority.

    Without disputing the necessity of the open border, we agree with
    the majority of our respondents that opening the border can not have
    a magical influence on the economy when and especially while the
    domestic economic and political systemic problems are not yet solved.

    When we talk about the problems we mean the low level of the
    diversification of the economy and the existence of monopolies
    and the lack of economic competitiveness and a number of other
    entrenched obstacles. After all, today we have two open borders,
    but the economic issues of the country are not resolved. In fact,
    even with closed borders, foreign trade turnover between Armenia and
    Turkey last year was 4.7 percent of the total foreign trade turnover,
    which is more than the trade with Georgia and Iran where with open
    borders, they amount to 2.4 percent and 4.3 percent respectively.

    Needless to say, our trade balance with Turkey is negative; indeed
    the ratio is 98.5 to 1.5 percent. That is, nearly the entire trade
    activity is in the form of imports by Armenia. Even with the open
    border doubling or tripling the trade turnover between our countries,
    it is obvious that the volume of exports will remain low. No doubt,
    that the open border has a certain transit potential for some goods
    which will in the long-run create some economic opportunities, but
    the economic miracles and long-run solutions should be sought not in
    or across the borders but at home.
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