Q&A: OPENING OF ARMENIA -TURKEY BORDER OR IMPROVING THE DOMESTIC ECONOMIC AND POLITICAL ENVIRONMENT
Hayk Petrosyan
The Civilitas Foundation
Wednesday, 09 December 2009 10:58
Dialogue
In our previous poll, we asked which would be of greater benefit to
Armenia’s economy , opening of Armenia -Turkey border or Improving
the domestic economic and political environment . Before proceeding
to discussion of the poll results, a little bit about the poll itself.
One of the respondents asked whether the choices contradict each
another, or if it is not possible to implement both simultaneously.
Certainly it is possible and even desirable. The question however was
really the following: which of these two measures is more tangible,
visible and in the long-run will have a positive influence on the
economy of Armenia. In other words, what is the most direct way of
solving economic problems: opening the Armenia-Turkey border by all
means or directing our efforts to finding solutions to the internal
systemic problems.
The majority of our respondents, 88 percent, think that domestic
reforms will have a better influence on the economy. Fourteen percent
think that opening the border is a higher priority.
Without disputing the necessity of the open border, we agree with
the majority of our respondents that opening the border can not have
a magical influence on the economy when and especially while the
domestic economic and political systemic problems are not yet solved.
When we talk about the problems we mean the low level of the
diversification of the economy and the existence of monopolies
and the lack of economic competitiveness and a number of other
entrenched obstacles. After all, today we have two open borders,
but the economic issues of the country are not resolved. In fact,
even with closed borders, foreign trade turnover between Armenia and
Turkey last year was 4.7 percent of the total foreign trade turnover,
which is more than the trade with Georgia and Iran where with open
borders, they amount to 2.4 percent and 4.3 percent respectively.
Needless to say, our trade balance with Turkey is negative; indeed
the ratio is 98.5 to 1.5 percent. That is, nearly the entire trade
activity is in the form of imports by Armenia. Even with the open
border doubling or tripling the trade turnover between our countries,
it is obvious that the volume of exports will remain low. No doubt,
that the open border has a certain transit potential for some goods
which will in the long-run create some economic opportunities, but
the economic miracles and long-run solutions should be sought not in
or across the borders but at home.