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TOWARD A MORE PROSPEROUS UNION
By Vilen Khlgatyan
http://times.am/?l=en&p=11638
President Serzh Sargsyan paid a visit to Moscow in early August to
meet with his Russian counter-part, Vladimir Putin. While political,
military, and economic matters were discussed, the visit was also a
chance for Sargsyan and Putin to exchange their views on the proposed
economic bloc, the Eurasian Union (EAU). It is no secret that the EAU
is Putin's project, and one which he is likely to devote much of his
time in order to bring to a successful launch by the targeted date of
2015. Already, steps are being taken to incorporate the Customs Union
of Belarus, Kazakhstan, and Russia with the EAU. The incorporation
of the Collective Security Treaty Organization (CSTO) is another
possibility, should Moscow decide to add a military component to
the EAU. While Armenia does not share a common land border with any
members of the Customs Union, Putin did say in the press conference
after his meeting with Sargsyan, that international agreements signed
by the members of the Customs Union could help overcome this. Likely,
what this meant is the implementation of free trade agreements between
the members and Armenia.
It is noteworthy that President Putin brought up the geographic
isolation of Armenia from Russia and the other members of the Customs
Union because thus far that has been one of the main arguments within
the Armenian government and civil society against Armenia joining
the proposed EAU. However, under closer review, this excuse alone is
not enough to outweigh the positive outcomes of Armenian membership
in the EAU. True, a common border would be advantageous, and tense
relations between Tbilisi and Moscow do not help matters. Yet, such
a union would provide Armenia with a large economic market that is
easily accessible as well as familiar with Armenian products. Simply
put, the Armenian market is too small for Armenian businessmen to
expand and reach their full potential, and this is one of the reasons
certain sections of the economy have been monopolized or oligopolies
have taken hold. Russian and other businessmen would be unlikely
to allow Armenian businessmen into their domestic markets without
getting the same opportunity in Armenia. The Armenian market is in
need of foreign direct investment, as well as competition in various
segments. Businessmen from the EAU would provide this, particularly
with a free trade clause in place. Another factor is the large Armenian
diaspora in Russia, which is not only the largest in the world, but
larger than all the Armenian diasporas of the European Union (EU)
combined. The stimulus the Armenians residing in the member states
of the Customs Union and proposed EAU would provide to furthering
Armenia's trade is immeasurable, assuming the Armenian government
incorporated them in their plans.
A second reason thrown around by those opposed to Armenian membership
in the EAU is the supposed benefits Armenia has to gain from closer
integration and possible membership within the EU. A number of recent
developments alone show this line of argument to be weak. First, the
EU is facing a serious identity problem, not least of which is caused
by the solvency crisis facing a number of eurozone members. This has
prompted the major credit rating agencies to downgrade the status of
several EU members, including the major players, Germany and France.
Furthermore, Armenia's trade turnover with the EU is barely more than
its trade with Russia alone. This suggests, which indeed Presidents
Sargsyan and Putin did, that there is still much room to improve
trade between the two states. Therefore, more should be done in this
direction to reach the desired levels, joining the proposed EAU is
that step. Moreover, Armenia does not share a common border with the
EU either, therefore if it is not feasible to join the EAU because
Armenia lacks a common border with a member state, the same logic
applies to the EU as well. Finally, there is no stipulation being
presented by either the EU nor Russia that membership in one economic
union precludes cooperation with another.
Of course Armenia should work with all states, and should keep its
options open, but there are times when critical decisions must be
made to go in either one direction or another, remaining undecided
will not do. Thus, a serious study must be launched by the Armenian
government to assess the positives and negatives of Armenian membership
in the EAU.
Vilen Khlgatyan is the Vice-Chairman of Political Developments Research
Center (PDRC)
29.08.12, 13:42
From: A. Papazian
By Vilen Khlgatyan
http://times.am/?l=en&p=11638
President Serzh Sargsyan paid a visit to Moscow in early August to
meet with his Russian counter-part, Vladimir Putin. While political,
military, and economic matters were discussed, the visit was also a
chance for Sargsyan and Putin to exchange their views on the proposed
economic bloc, the Eurasian Union (EAU). It is no secret that the EAU
is Putin's project, and one which he is likely to devote much of his
time in order to bring to a successful launch by the targeted date of
2015. Already, steps are being taken to incorporate the Customs Union
of Belarus, Kazakhstan, and Russia with the EAU. The incorporation
of the Collective Security Treaty Organization (CSTO) is another
possibility, should Moscow decide to add a military component to
the EAU. While Armenia does not share a common land border with any
members of the Customs Union, Putin did say in the press conference
after his meeting with Sargsyan, that international agreements signed
by the members of the Customs Union could help overcome this. Likely,
what this meant is the implementation of free trade agreements between
the members and Armenia.
It is noteworthy that President Putin brought up the geographic
isolation of Armenia from Russia and the other members of the Customs
Union because thus far that has been one of the main arguments within
the Armenian government and civil society against Armenia joining
the proposed EAU. However, under closer review, this excuse alone is
not enough to outweigh the positive outcomes of Armenian membership
in the EAU. True, a common border would be advantageous, and tense
relations between Tbilisi and Moscow do not help matters. Yet, such
a union would provide Armenia with a large economic market that is
easily accessible as well as familiar with Armenian products. Simply
put, the Armenian market is too small for Armenian businessmen to
expand and reach their full potential, and this is one of the reasons
certain sections of the economy have been monopolized or oligopolies
have taken hold. Russian and other businessmen would be unlikely
to allow Armenian businessmen into their domestic markets without
getting the same opportunity in Armenia. The Armenian market is in
need of foreign direct investment, as well as competition in various
segments. Businessmen from the EAU would provide this, particularly
with a free trade clause in place. Another factor is the large Armenian
diaspora in Russia, which is not only the largest in the world, but
larger than all the Armenian diasporas of the European Union (EU)
combined. The stimulus the Armenians residing in the member states
of the Customs Union and proposed EAU would provide to furthering
Armenia's trade is immeasurable, assuming the Armenian government
incorporated them in their plans.
A second reason thrown around by those opposed to Armenian membership
in the EAU is the supposed benefits Armenia has to gain from closer
integration and possible membership within the EU. A number of recent
developments alone show this line of argument to be weak. First, the
EU is facing a serious identity problem, not least of which is caused
by the solvency crisis facing a number of eurozone members. This has
prompted the major credit rating agencies to downgrade the status of
several EU members, including the major players, Germany and France.
Furthermore, Armenia's trade turnover with the EU is barely more than
its trade with Russia alone. This suggests, which indeed Presidents
Sargsyan and Putin did, that there is still much room to improve
trade between the two states. Therefore, more should be done in this
direction to reach the desired levels, joining the proposed EAU is
that step. Moreover, Armenia does not share a common border with the
EU either, therefore if it is not feasible to join the EAU because
Armenia lacks a common border with a member state, the same logic
applies to the EU as well. Finally, there is no stipulation being
presented by either the EU nor Russia that membership in one economic
union precludes cooperation with another.
Of course Armenia should work with all states, and should keep its
options open, but there are times when critical decisions must be
made to go in either one direction or another, remaining undecided
will not do. Thus, a serious study must be launched by the Armenian
government to assess the positives and negatives of Armenian membership
in the EAU.
Vilen Khlgatyan is the Vice-Chairman of Political Developments Research
Center (PDRC)
29.08.12, 13:42
From: A. Papazian