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Discuss Armenia's accession to Customs Union
Material posted: Publication date: 09-11-2013

The decision of Armenia's accession to the Customs Union of Belarus, Kazakhstan and Russia, announced on 3 September this year in Moscow the President of the Republic Serzh Sargsyan, was strongly criticized by many Armenian politicians. So, the Deputy of Parliament Zaruhi Postanjyan has complained about possible rise in prices, the deterioration of the social situation of the population, increasing emigration from the country. She believes that in Moscow the Declaration of accession to the Customs Union has become a serious challenge to the sovereignty of Armenia and Nagorno-Karabakh Republic. Moreover, the MP has called on the Armenian people "to Wake up and defend your homeland".

Here only it is not clear who should defend the country, if, according to the estimates of Armenian sociologists, the majority of residents supported the decision of the Armenian President. As shown by opinion polls, more than half of Armenians have always advocated a political Union with Russia. Russia the most popular followed by the EU, Iran and the United States. And such statistics is quite understandable. According to the President of the Union of Armenians of Russia Ara Abrahamian, Russia today is home to more than 2.5 million Armenians, i.e. practically every Armenian family in Armenia has relatives in Russia. In addition, temporarily in Russia is 200 to 300 thousand citizens of Armenia. In 2012. into the country from abroad received 1.7 billion, 1.47 billion (85.6%) was transferred from Russia, the money she lived every sixth-seventh Armenian family.

In addition to the social aspect it is interesting to consider the economic aspects. In recent years, Russia is the largest investor in Armenia's economy: total volume of investments amounted to $ 2.45 billion (44.1% of total foreign investment). Russia is ready to allocate a loan to Armenia for the reconstruction and extension of term of operation of Metsamor NPP, Armenia giving a third of all electricity (it is characteristic that the EU has repeatedly demanded to close the station). Russia plans to carry out direct investments for the rehabilitation and modernization of the chemical plant "Nairit". Armenia promised $ 100 million to the project for the construction of a strategic transport corridor "North-South". From the Russian Railways expected investment of $ 0.5 billion for the financing of the highway Armenia-Iran.

Today Russian enterprises in Armenia operate efficiently, pay taxes to the budget, provide employment for tens of thousands of people. In addition, Russian enterprises in the sphere of communication and energy provide a certain technological level of development of the country.

And this is only the declared profit. In addition, the entry into the Customs Union entails a reduction in prices for Russian gas (about $ 189 at the border), and imported from Russia for nuclear fuel.

We should not forget that the main market for Armenian goods is in Russia and not in Europe. So, 95% of wine production goes to Russia. The trade turnover between the two countries last year increased by 22 %, to $ 1.2 billion. Export of Armenia in Russia in January-August 2013 amounted to $ 817.2 million. Withdrawal fees for accessing the market of the Customs Union will sharply increase the volume of Armenian exports.

What can the EU respond? 12 countries-EU members investing in Armenia, provide about 20 % of the total investment. Yerevan was promised investment in the development of the textile industry and, what is particularly "valuable" (smiley), - grants for democratic reform (probably, according to the Syrian sample).

It is interesting that not so long ago the Ambassador of Poland to Armenia, Yerevan promised in case of Association with the EU an annual profit of $ 150 million in two to three years after the Association with the EU. However, they were understanding of where and how they will form such earnings. However other citizen of Poland, member of the European Parliament Jacek Saryusz-Wolski says the low efficiency of the program "Eastern partnership", which includes Armenia. The politician believes that the lack of success of the project is not only guilty of the countries targeted by the project, but also the Brussels, whose fault is the excessive bureaucratization of the process, vague European perspective of the countries participating in the project and poor funding initiatives.

In turn, Director of the European center of geopolitical analysis Mateusz Piskorski believes that the signing of the agreement with the EU in General would lead to job losses in Armenia. Armenian goods and if it will meet the European standards, still will not be competitive in the European markets. Today, agriculture in the EU due to the large subsidies manufactures products at dumping prices accordingly to compete with the Europeans, the Armenian farmers are simply unable.

But back to the statement of the Deputy Zaruhi Postanjyan. What she foretold of Armenia in case of joining the Customs Union, already includes a number of "neophytes" among the countries-EU members, rashly entered into this Union. So, Latvia, 10 years ago joined the European Union today has a multi-billion dollar debts. 250,000 people - the most active population of Latvia have left the country in search of a better life. After joining the EU, Latvia has lost many of its industries: sugar, fishing, engineering. Its products are not in demand in Europe, so residents are forced to try to push her into the Russian market – so much dear since the days of the USSR.

New to the EU - Croatia and Latvia, has debts running into tens of billions of dollars. Every fourth Croat is looking for a job today. Industrial production is falling, investment from the EU are not available. Same problem experienced today Romania, Hungary and other countries.

At the same time economists of the European Bank for reconstruction and development themselves described the Customs Union as "the first successful example of economic integration between the countries of the former Soviet Union." Participation of Yerevan in the CU and EEC will objectively contribute to the preservation of the political and socio-economic stability in the country, will ensure the stability of the position of the current leadership of the Republic. Specific targeted assistance and targeted investments in key sectors of the Armenian economy from partners (Russia, Belarus and Kazakhstan) to present more relevant and urgent for Yerevan, than abstract promises of Europeans on the financing of programmes in the field of rehabilitation of the business climate and attract foreign investment.

It is important that the benefits from Armenia's accession to the Customs Union and entry into the Eurasian economic Union is not limited to the economy.

Russia remains an important guarantor of national security of Armenia, plays a key role in ensuring the defense of the Republic. In Armenia is the 102nd Russian military base (Gyumri), protection of border are Russian border guards. The agreement on military base extended until 2044г. Armenia is a key Outpost of the security of Russia's southern flank. Russian officials have repeatedly said that any foreign aggression against Armenia will be considered as a challenge to Russia and its interests. All this allows the experts to conclude that Armenia needs Russia more than Russia needs Armenia.

Representatives of the European Union has repeatedly offered to Yerevan to withdraw the Russian military to come under the umbrella of NATO. But whether NATO to compensate the Russian factor in the security sphere? It is obvious that today the Europeans are not ready to take the place of Russia in Gyumri, to supply Armenia with weapons at preferential order. Neither Brussels nor Washington does not want to bet on Armenia to the detriment of its relations with Azerbaijan. For years the US and the EU after the Karabakh war, supported the Armenia's neighbors: Turkey and Azerbaijan. Today they welcomed the idea of creating a tripartite military Alliance Georgia-Azerbaijan-Turkey, which is absolutely not in the interests of Yerevan. On the other side are Russia and Iran, which for decades retain good relations with Armenia, confront its economic blockade.

Separately it is necessary to consider the Karabakh problem. The loss of the Russian military presence could provoke Baku on tough action against Nagorno-Karabakh. Russia is the most active in addressing this issue, while Europe has no clear vision of its settlement. Moreover, individual officials in the West have advocated "territorial integrity" of Azerbaijan and openly invite the Armenians to withdraw from Karabakh.

In General, the social sphere, from the economic side, what with the military, and the EU may not be equally useful for Armenia, as Russia. Today the EU has many of its own internal problems that need to be addressed in the coming years (if not decades), and new members will only arise new problems that nobody needs. So the decision of the Armenian leadership, strategically important to the interests of the majority of the population of this country. A lot though will depend now from Moscow – will she be able to withstand these Yerevan promises and guarantees? Actually, this is the key to success and prosperity not only of Russia and not only Armenia, but all States that decided to build their own future together, in the framework of the Customs Union.

Arthur Vaserov


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