The market of the EAEU has become more accessible for business structures of Armenia

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The market of the EAEU has become more accessible for business structures of Armenia 17.03.2017 14:38



Head of the Government of Armenia Karen Karapetyan paid an official visit to Tbilisi, which was very warmly met by Georgy Kvirikashvili, the Prime Minister of Georgia. This visit can be considered very important not only for the development of bilateral relations, but also for the entire regional policy of Yerevan and Tbilisi.

The composition of the delegation, which included the leaders of most key ministries, testified to the importance that official Yerevan attaches to relations with Georgia. The visit program was extensive; one may briefly mention only some of its key elements. During the bilateral meeting of the heads of government, the sides reaffirmed their readiness to deepen regional cooperation, activate trade turnover and use all the potential for this. The interlocutors expressed satisfaction with the level of cooperation in the energy sector and noted the importance of the prospects for further development of interaction in the field of transport communication. In terms of expanding trade and economic relations, it was pointed out the importance of the free economic zone in Meghri and the possibility of using it as a platform for ensuring greater accessibility of the markets of third countries.

The Prime Minister of Armenia met with Georgian President Georgi Margvelashvili and with His Holiness and Beatitude Catholicos-Patriarch of All Georgia Ilya II. He also met with the representatives of the Armenian community of Georgia, during which Karapetyan said, in particular: "... we agreed to give a new, regional quality to our economic cooperation, in order to often appear before the outside world as a large joint market it is a sphere of tourism, our new free economic zone, which we are creating with neighboring Iran, and other spheres ... The Georgian partners are invited to use the site of Armenia to enter the market of the EAEU. An agreement was reached on appointing an "open day" for Georgian partners, during which various programs will be discussed with them in Armenia".

It's not a secret for anyone that the transport communication between Armenia and the EAEU countries remains one of the bottlenecks, including because of very difficult Russian-Georgian relations. If Armenia is interested in solving logistical problems for establishing more stable ties with its main economic partner and military-political ally, Russia, Tbilisi is in the "energy corridor" from Iran to Georgia through Armenia. It is also important that Tehran demonstrates interest in such a corridor, for which access to the markets of neighboring states is very important.

It should be noted that two weeks before the Tbilisi visit of the Armenian Prime Minister to Prague, a meeting was held between Georgian Deputy Prime Minister for Relations with Russia Zurab Abashidze and Deputy Foreign Minister Grigory Karasin. According to its results, there was quite encouraging information for the Armenian side that Moscow and Tbilisi decided to use the "Agreement between the Government of the Russian Federation and the Government of Georgia on the Basic Principles of the Customs Administration and Monitoring of Trade in Goods" signed in 2011 also "Agreement between the Government of the Russian Federation and the Government of Georgia on the basic principles of the mechanism of customs administration and monitoring of trade in goods." This document enables the parties to trade and develop transport communications through Abkhazia and South Ossetia, without touching on the issue of the status of the two republics, thanks to the Swiss SGS being the operator of customs points.

The whole complex of these circumstances provoked lively discussions in the Georgian, Armenian and Russian press with the assumption that the parties had agreed to open a railway through Abkhazia. Contribution to the discourse was made by the opposition "National Movement". In its statement of February 27, it notes that the restoration of the railway communication between Russia and Georgia is "absolutely unacceptable". "This will inflict a mortal wound on the territorial integrity of Georgia, exclude the return of internally displaced persons, the preservation of our policy of non-recognition and restoration of the sovereignty of Georgia, Said the representative of the "National Movement" Nika Rurua. "The opening of the railway through Abkhazia is a betrayal of national interests and is unacceptable, as an enemy step, from which only Russian separatists will benefit," the prominent "national" alarms.

Special representative of the Prime Minister of Georgia Z. Abashidze was the first to respond to accusations from the opposition. "This is a lie, and I confirm again and again that the Georgian government does not negotiate with anyone on the issue of the Abkhazian railway anywhere," he said. And further: "Restoration of the railway communication through Abkhazia is directly connected with the problems of the territorial integrity of Georgia". Vice Prime Minister, Energy Minister Kakha Kaladze also denied the accusations of the opposition: "For the first time I hear. This is incorrect information ... The government did not even have a discussion on this particular issue".

In his turn, the head of the Armenian government, answering the questions of deputies in the parliament, said that the possibility of opening the railway through Abkhazia was not discussed at the talks. But other possible routes were discussed. "Do I think that there is a solution? Yes. We are at the stage of negotiations", Karapetyan said.

If the land routes through Abkhazia and South Ossetia were not discussed during negotiations with Georgia, what did the heads of government of the two countries agree about then? The real alternative in this case could only be projects to build and modernize the routes currently used, first of all Kazbegi - Upper Lars (and further to Russia), as well as resuscitation of ways that have a prospect of realization in the short term - an increase in transport flows by sea Direction. It is a route that connects Armenia with the Russian port of Caucasus through the Georgian ports of Poti and, possibly, Batumi.

In fact, one could only talk about resuscitation of this project, which as early as the first half of the 2000’s, as businessmen of Armenia and Russia, as well as government officials and parliamentarians of the two countries tried to initiate. However, even the support at the highest level did not save the project from failure for a number of reasons: the lack of technical equipment at that time of the port of Caucasus; The interest of a part of the Armenian oligarchs that the flow of goods between Armenia and Russia would go either through Kazbegi - Upper Lars, or through the Ukrainian port of Illichivsk and then through Batumi to the Armenian border; High railway tariffs and the absence of large investors.

Ten years ago such a large private investor was found. It was an Uzbek businessman Hakim Matchanov, who owned a ferry with a capacity of 50 cars. However, the ferry made only three flights and then found itself in a dead end. Chairman of the Union of Industrialists and Entrepreneurs of Armenia Arsen Ghazaryan mentioned the problems of H. Matchanov with the Russian border and customs services of the port of Caucasus. Ostensibly the Russian border service did not give permission to the ferry for long-term use of this port. In addition, Armenian sources claimed that customs officials refuse to service the ferry, explaining this by the lack of a customs infrastructure. Matchanov was expected to build it. But because of the considerable expenses "sheepskin" did not cost manufacture. This led to the failure of the project.

The "five-day war" between Georgia and South Ossetia in 2008 exacerbated the situation. And only now the situation has changed in a number of key parameters, and Armenia and Georgia, on the one hand, Russia and Armenia, on the other, have agreed on resuscitation of the project. On March 2, the first consignment of cargoes transported by the South Caucasus Railway (the Armenian Railway, located in the concession department of the Russian Railways) arrived in Yerevan at reduced rates in the direct international rail and ferry service on the Caucasus-Poti port line.

Reduction of tariffs for transportation of goods by cars on this line became possible due to the purchase by the SCR of places on the ferry that runs along the specified route, as well as negotiations on simplification of the order of transportation and optimization of tariffs for freight traffic with international partners. Discounts for ferrying one car to / from Armenia will be $2,000 on average. Reduction of tariffs for railway ferry transportations affects all exporters and importers transporting goods in the Armenian direction. In addition, ferry transportations have become cheaper compared to road transport; they are also safer and more stable.

"We continue to work in this direction and are conducting active negotiations with colleagues from RWR and the Georgian Railways. Just the other day, we managed to reduce the tariffs of the railways for the transportation of goods in the Armenian direction by an average of 30% (about $ 500)," said Dmitry Gvozdev, the head of the Road Transport Center of SCR "SCR". According to him, such discounts allow businessmen to use competitive rates on the alternative to the Upper Lars route and to avoid wasting time and money, which is dangerous for the way on the Georgian Military Road.

If the aforementioned logistic scheme will work rhythmically, and for this there are a lot of prerequisites, then the Russian market and the market of the EAEC countries will become much more accessible to economic entities of Armenia, and in the future, perhaps, Iran. For the Armenian economy this is of exceptional importance. It is also important that the new/old scheme benefits Georgia itself. Recall that at one time the Upper Lars checkpoint was originally supposed to ensure the transit of Armenian cargo to the Russian Federation. However, now they are actively used only by Georgian business structures and Russian tourists arriving to rest in Georgia and Armenia.


Sarkis Martirosyan