Manipulation Related to Growth in Exports from Armenia to Russia

On January 24, 2017, within the framework of the meeting held in Moscow, prime ministers of Armenia and Russia addressed the success Armenia has registered in the EAEU. In particular, Russian Prime Minister Dmitri Medvedev mentioned that “in spite of the global economic conjuncture, the changes in prices for energy resources and a number of other economic factors, exports from Armenia to the EAEU countries increased by around 70% during 2016. According to Medvedev, the membership had a positive impact on Armenia, allowing for such a sharp increase in exports.

RA export to EAEU member countries is one of the very few indicators that have registered progress. Hence, it is continually highlighted by the Eurasian Economic Commission to justify the point that the EAEU has had a positive impact on the RA economy. However, 70% in exports from a country which expects only 2.2% economic growth is strange, to say the least. In 2016, numerous studies were published related to causes of increase in exports. First of all, 70% increase in exports was registered against the backdrop of the sharp decline in 2015. The point is that exports from Armenia to EAEU member countries decreased and reached 256.2 million USD in 2015 compared to 324.6 million USD in 2014. This means that in 2016, exports from Armenia to the EAEU have increased only by 18% compared to 2014.

But even that 18% growth is not related to the positive impact of the EAEU on the Armenian economy.  The studies of the commodity structure of exports show that growth in exports has been registered due to products which Armenia itself imports.  In particular, compared to the comparable period of 2015, exports of tomato paste have increased by 2000% (20 times) in the first half of 2016, exports of cheese and cottage cheese have increased by 450%, and caviar and fish exports have registered more than 300% growth. In the same period, exports of vaccines have increased by more than 9.6 times, different vegetables – 5.8 times, clay – 8.3 times, and heating systems, air conditioner parts, remote controls and other equipment – by 3.6 times. In parallel, exports of products of Armenian origin traditionally exported to Russia (apricots, peaches, beer, mineral water, some types of vegetables, etc.) suffered a considerable decline in 2016.                                                                     These data make it obvious that 70% increase in exports is not the result of strengthening of Armenia’s trade positions and development of Armenian production. Rather, it is the result of simple re-export of products imported from Turkey to Armenia. As we know, in the context of crisis in Russian-Turkish relations, Russia put an embargo on the import of Turkish goods. As a result, some businessmen imported their goods to Armenia, and obtaining the “Made in Armenia” label, re-exported them to Russia.

Thus, it is obvious that the indicator continually highlighted by the Russian Prime Minister and the Eurasian Economic Commission does not have anything to do with the opportunities provided by the EAEU as an integration unit. Neither does it have anything to do with the economic development in Armenia.