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BORDERS AND BUSINESS: UNION LOOKS AT CLOSED BORDER IMPACT ON TRADE
By Gayane Lazarian
ArmeniaNow
http://armenianow.com/economy/38613/turkey_armenia_trade_union_manufacturers
08.06.12 | 14:57
While various diplomatic maneuvers are used to regulate
Armenian-Turkish relations politically, business relations between
the two countries have long been non-officially established and keep
developing with each year aimed at increasing commodity turnover and
contributing to the opening of the border.
Turkey imposed a ban on the import of Armenian goods in 1993. It also
closed the border with Armenia because of the Karabakh war.
Businessmen started importing and exporting goods through third
country, Georgia. According to the Union of Manufacturers and
Businessmen of Armenia, in 2011 the bilateral trade between Armenia
and Turkey totaled $240 million.
"Official Turkish sources report that there is zero commodity
circulation, meaning that nothing is exported from Turkey to Armenia,
and that it all goes to Georgia. Armenian sources say $240 million,
the main part of which is Turkish export to Armenia, and only one
million is Armenian export to Turkey. The reason for this low index
is partly the "Made in Armenia" label, which makes it impossible for
Turkey to import, because in fact there is high potential for Armenian
export to Turkey, too," says president of the Union Arsen Ghazaryan.
The union is currently trying to eliminate the obstacles hindering
direct trade and to create conditions to have Made-in-Armenia goods
easily exported to Turkey.
Lack of diplomatic relations forces businessmen to seek other ways
for import and export of goods at the expense of economic losses. It
is particularly difficult for drivers of trucks with Armenian state
license plates. The Turkish law requires that drivers have work permit
visas (it goes for all countries, not only Armenia).
"Other countries don't have a problem with that, as they have
embassies in Turkey. We have found an in-between solution, which is
that Armenian drivers can be issued Turkish visas at the embassy in
Georgia," says Ghazaryan.
Armenia doesn't demand the same thing from foreign-country cargo
truck drivers, and it's flooded with Made-in-Turkey goods.
Businessmen stress that if the Armenian legislation regulating
this field gets more demanding it would first of all be damaging to
Armenian businessmen.
The union's executive director Eduard Kirakosyan says light industry
in Armenia operates mainly with raw material imported from Turkey.
"If we restricted border passage, we'd greatly challenge light
industry. After all, before taking a step we have to consider all
possible consequences. Only when we have strong economy can we afford
dictating our rules to our neighbor country, like Israel does.
Meaning that it's not about Turkey now, it's about us," says
Kirakosyan.
Research titled Eyes of Business Opinion Leaders, carried out within
the framework of Support to Armenian-Turkish Rapprochement project,
shows what the closed border means in the 21st century. The survey
presents the economic state of countries, the most promising fields
and formats of potential cooperation under closed borders.
Project coordinator Armen Melkonyan says the key question the research
raises is whether business relations can manage growing to an extent
when they can impact the political processes, rather than the other
way around.
During the research 265 successful business entities were surveyed -
165 in Armenia and 100 in Turkey. Focus group discussions were held
in Yerevan and Turkish cities - Kars, Malatya and Denizli.
The research target fields were agriculture, construction,
construction engineering, construction material manufacturing,
information technologies, tourism, textile industry and transport.
The survey has revealed that 40 percent of Armenian and Turkish
businessmen believe tourism is a possible field for cooperation,
31 percent pointed out textile industry. The Armenian side also
mentioned goldsmith and electric power production, the Turkish side
selected animal husbandry.
Nonetheless, many of the businessmen said that politics does have an
impact on business and that's the way it should be, as national issues
must be a priority to a businessman. Some have their hopes for the
opening of the border, saying that a new field for cooperation would
open. An Armenia-based businessman (names aren't identified) said that
business finds its way no matter what. A Turkey-based businessman said
that Armenians are good at business and that for 15 years he had been
cooperating with them without losing a penny (or a lira, as he said).
The survey was implemented by USAID financial support within the
framework of Eurasia Cooperation Foundation and Global Political
Trends Center's Support to Armenian-Turkish Rapprochement project.
By Gayane Lazarian
ArmeniaNow
http://armenianow.com/economy/38613/turkey_armenia_trade_union_manufacturers
08.06.12 | 14:57
While various diplomatic maneuvers are used to regulate
Armenian-Turkish relations politically, business relations between
the two countries have long been non-officially established and keep
developing with each year aimed at increasing commodity turnover and
contributing to the opening of the border.
Turkey imposed a ban on the import of Armenian goods in 1993. It also
closed the border with Armenia because of the Karabakh war.
Businessmen started importing and exporting goods through third
country, Georgia. According to the Union of Manufacturers and
Businessmen of Armenia, in 2011 the bilateral trade between Armenia
and Turkey totaled $240 million.
"Official Turkish sources report that there is zero commodity
circulation, meaning that nothing is exported from Turkey to Armenia,
and that it all goes to Georgia. Armenian sources say $240 million,
the main part of which is Turkish export to Armenia, and only one
million is Armenian export to Turkey. The reason for this low index
is partly the "Made in Armenia" label, which makes it impossible for
Turkey to import, because in fact there is high potential for Armenian
export to Turkey, too," says president of the Union Arsen Ghazaryan.
The union is currently trying to eliminate the obstacles hindering
direct trade and to create conditions to have Made-in-Armenia goods
easily exported to Turkey.
Lack of diplomatic relations forces businessmen to seek other ways
for import and export of goods at the expense of economic losses. It
is particularly difficult for drivers of trucks with Armenian state
license plates. The Turkish law requires that drivers have work permit
visas (it goes for all countries, not only Armenia).
"Other countries don't have a problem with that, as they have
embassies in Turkey. We have found an in-between solution, which is
that Armenian drivers can be issued Turkish visas at the embassy in
Georgia," says Ghazaryan.
Armenia doesn't demand the same thing from foreign-country cargo
truck drivers, and it's flooded with Made-in-Turkey goods.
Businessmen stress that if the Armenian legislation regulating
this field gets more demanding it would first of all be damaging to
Armenian businessmen.
The union's executive director Eduard Kirakosyan says light industry
in Armenia operates mainly with raw material imported from Turkey.
"If we restricted border passage, we'd greatly challenge light
industry. After all, before taking a step we have to consider all
possible consequences. Only when we have strong economy can we afford
dictating our rules to our neighbor country, like Israel does.
Meaning that it's not about Turkey now, it's about us," says
Kirakosyan.
Research titled Eyes of Business Opinion Leaders, carried out within
the framework of Support to Armenian-Turkish Rapprochement project,
shows what the closed border means in the 21st century. The survey
presents the economic state of countries, the most promising fields
and formats of potential cooperation under closed borders.
Project coordinator Armen Melkonyan says the key question the research
raises is whether business relations can manage growing to an extent
when they can impact the political processes, rather than the other
way around.
During the research 265 successful business entities were surveyed -
165 in Armenia and 100 in Turkey. Focus group discussions were held
in Yerevan and Turkish cities - Kars, Malatya and Denizli.
The research target fields were agriculture, construction,
construction engineering, construction material manufacturing,
information technologies, tourism, textile industry and transport.
The survey has revealed that 40 percent of Armenian and Turkish
businessmen believe tourism is a possible field for cooperation,
31 percent pointed out textile industry. The Armenian side also
mentioned goldsmith and electric power production, the Turkish side
selected animal husbandry.
Nonetheless, many of the businessmen said that politics does have an
impact on business and that's the way it should be, as national issues
must be a priority to a businessman. Some have their hopes for the
opening of the border, saying that a new field for cooperation would
open. An Armenia-based businessman (names aren't identified) said that
business finds its way no matter what. A Turkey-based businessman said
that Armenians are good at business and that for 15 years he had been
cooperating with them without losing a penny (or a lira, as he said).
The survey was implemented by USAID financial support within the
framework of Eurasia Cooperation Foundation and Global Political
Trends Center's Support to Armenian-Turkish Rapprochement project.