Azernews.Az

By Abdul Kerimkhanov

The process of transformation in economy, as announced by the Armenian Prime Minister, is accompanied by a serious drop in export figures.

Nikol Pashinyan admits that there is a serious systemic problem, but he could not give a clear answer to the journalists' question when the situation will improve.

Meanwhile, since the autumn of last year, exports from Armenia have been steadily declining against the backdrop of declarations and intentions of the government to strengthen and rely on the export-oriented economy.

According to the results of the first quarter, Armenian exports registered a fall of 8.6 percent, compared to the same period of 2018. In January-March 2018, products worth about $595 million were exported from Armenia, and in January-March 2019 this figure dropped to $543 million.

It is noteworthy that exports from Armenia decreased in all directions. Goods to the CIS / EAEU countries were supplied respectively by 5 percent and 6 percent less, while to the EU countries even by 25 percent.

Pashinyan’s dismissive attitude towards the mining industry, which he showed from the very beginning of his coming to power, boomeranged Armenia’s export figures. Thus, the volume of copper exports from Armenia declined for the first time in 10 years. In addition, the Rusal Armenal plant in Yerevan put restrictions on the aluminum foil supply to the U.S., which previously accounted for half of all Armenian exports to this country.

However, the matter is not limited to problems in the mining industry and a corresponding decrease in the supply of metals to Europe. It is much more serious that Armenia reduces exports both to the CIS countries and to the EAEU, which it used traditionally to supply finished products. This is exactly what the prime minister was proud of at a press conference on the occasion of his annual activity.

Thus, in January to February 2019, exports to Russia declined by 3.6 percent, although it was the major export destination for Armenian alcohol and food products, textiles, pharmaceuticals and jewelry.

Raffi Mkhcyan, Armenia’s Exporters Union Chairman, the country's export performance is affected by the general unhealthy atmosphere in the country. He added that if any investor wishes to make investments in Armenia, the negative environment prevailing in the country will scare him away.

In addition to the unhealthy atmosphere, there is another danger. In the structure of exports from Armenia, the largest share after metal raw materials is occupied by food products, and the situation with the food export to Russia may continue to deteriorate.

The fact is that after the introduction of the food embargo in 2014, Russia began to actively pursue import substitution policy, which gives results in the field of agricultural products. In addition, Russia has adopted the state program for the agriculture development and the food security doctrine (until 2020), which require its own production development to a certain, sufficiently high level. At the same time, the ratio of Russian and imported products is rapidly changing in favor local products.

Today, Russia has achieved the values for its own grain production fixed in the food security doctrine (the norm is at least 95 percent), sugar (80 percent), vegetable oil (80 percent), potatoes (95 percent), meat and meat products (85 percent).

Thus, Russia, which was considered a huge market for Armenian agricultural products, no longer needs Armenian goods. That is why in the medium term, it is possible to expect difficulties with the export of Armenian agricultural products.

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Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94

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