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Marina Brutyan

Armenia: Free Trade Area, Armenian Style, Or How To Defend Monopoly In The Country

Armenia is currently seeking an adequate formula for multilateral economic cooperation within diverse alliances. The standardized format of collaboration must appeal to everyone: the European Union (EU), Commonwealth of Independent States (CIS) and Armenia. Several declarations made by Prime Minister Tigran Sargsyan, a supporter of the West-orientated direction of development, attest to this need.

Between a rock and a hard place, autor: DomDada, źródło:

Between a rock and a hard place, author: DomDada, source:

CIS or EU?

On November 8, at a political assembly of the European People’s Party (EPP), Tigran Sargsyan anounced that Yerevan is to faithfully follow political and economic plans of integration with the European Union. “Currently, we are negotiating with the EU over the Association Agreement, and are launching deep and comprehensive free trade agreement negotiations,” said the Armenian Prime Minister.

Several weeks ago in Saint Petersburg, Tigran Sargsyan discussedthe subject of a Free Trade Area (FTA) within the post-Soviet region – another concept, rival to the EU proposal – with Vladimir Putin. After signing an agreement on a free trade zone with CIS on October 18, Armenia’s head of government ensured that it does not interfere with his country’s EU integration process. It seems that Sarsgysan believes both collaboration strategies could coexist.

Od lewej Tigran Sarkisjan i Władymir Putin, źródło:

From left: Tigran Sargsyan and Vladimir Putin, source:

Armenia is giving an impression of being able to declare its readiness for cooperation with everyone and with the aid of all possible formats. Many factors may contribute to this state of affairs, from dislike which worsens relations with some countries to an experimental search for an adequate form of an economic association. The acceptable one, according to the authorities’ definition, should protect interests of Armenian powerful businessmen, connected to the ruling spheres through kinship and political relationship, from serious harm. Furthermore, such a model of integrations should lower the customs duty – the main source of income to the state budget and the aforesaid businessmen. Everybody knows that the free zone area with the EU, or the CIS, must result in a fight against monopolies in several economic spheres of the country. The perspective of an FTA with the EU seems, however, to be a remote idea so far, and a project within the CIS frame could remain on paper only. Therefore, Yerevan is calmly declaring its support for both projects. Another matter altogether is functioning of the Customs Union between Russia, Kazakhstan and Belarus, which Armenia is qualified to join in the future. Yet Tigran Sargsyan announced his country has no such plans due to the lack of borders with the member countries. In fact, Armenia has no borders either with the CIS and EU.

Minister Gospodarki i Zrównoważonego rozwoju Gruzji Vera Kobalia, autor: Sulkhan jashi, źródło:

Vera Kobalia, Georgian Minister of Economy and Sustainable Development, author: Sulkhan jashi, source:

Common Economic Space… with Georgia

Georgia seems to be another matter all together. On November 7 in Yerevan, at a meeting with Vera Kobalia, Georgian Minister of Economy and Sustainable Development, Tigran Sargsyan said: “We consider Armenia and Georgia a single economic field. All the trade transportation obstacles between our countries should be removed, as it is in the best interest of our people. In this regard, with the support of the European Union, about 42 million Euros will be invested for making our country’s 3 border check points in accordance with European best standards within the upcoming two years” (according to the Government of the Armenia website). Armenian business in Georgia has an age-long history; then again, one country is easier to deal with than several at once. Yet such a common space has in fact no future. First, at the political and economic level, Georgia’s connections are closer with other neighbours, for instance Turkey and Azerbaijan, countries hostile towards Armenia. Secondly, a concept of a common space including only two players seems slightly ridiculous, and neither Azerbaijan nor Turkey would agree to economic collaboration as long as political problems related to the highly complex conflict in Nagorno-Karabakh will not be solved.

Charles Aznavour w Cannes, autor: GeorgesBiard, żródło:

Charles Aznavour in Cannes, author: GeorgesBiard, source:

Fight against monopolies. But what for?

On the other hand, Armenia joining any active community, or a free trade area, is, as a matter of fact, the only opportunity for breaking economic and political monopolies in the country. Their role, undermining the country’s journey towards prosperity, has been severely criticized by Armenian ambassador to Switzerland Charles Aznavour , a world-famous artist and the highest living authority figure for Armenians. In an interview, he told the Nouvelles d’Arménie: “We are doing nothing to help the people living there. Just the opposite. I know awful stories about the Mafiosi who are literally devouring the villagers on their lands.” In addition, Aznavour announced that due to the provoked, also by omnipresent monopolies, mass emigration, there would be left only one million citizens in the country.“Who are going to ask for help? Maybe the Chinese? ” he asked. The country’s leaders have not yet decided who shall be asked for aid to Armenia, but they are to do this, because, certainly, they are not capable to solve the problems on their own. Joining any free trade area notwithstanding, Armenian government is probably not ready for breaking the existing economic and political monopolies.

 Author: Marina Brutyan

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