Trade turnover grew 6 times, exports - 15 times: Reshetnikov on Armenia's GDP growth thanks to the EAEU

Russian Minister of Economic Development Maxim Reshetnikov gave an interview to Sputnik Armenia on the eve of the III Eurasian Economic Forum and the meeting of the Eurasian Intergovernmental Council, which will be held on September 30 and October 1 in Yerevan.

Eurasian integration has had a good impact on Armenia's economy: in 9 years the country has increased trade turnover with EAEU partners 6 times, and exports have grown 15 times. For about two years, the Center for Strategic Development (co-founded by the All-Russian Academy of Foreign Trade) has been working in Armenia, which actively promotes the development of Armenia's economy. Armenia's cooperation with Russia in the high-tech and IT sector is developing especially fast. In the near future, one of the Russian IT companies plans to get involved in a project to create charging infrastructure for electric vehicles in Armenia. About this and many other things - in the interview with the Minister of Economic Development of Russia Maxim Reshetnikov.

- The EEC pays attention to the fact that Eurasian integration is especially favorable for Armenia. After all, it is through participation in the EAEU that 35% of Yerevan's economy is “realized”. Tell us about what integration with Russia and other member states of the Union has given Armenia. And also about the benefits of the EAEU countries from cooperation with Armenia.

Cooperation within the EAEU is an opportunity to develop the national economy by expanding contacts with the countries of the Union. What its participants get: unimpeded access to the common market of goods, capital and labor. Today it covers 180 million people. This is over 2% of the world's population.

The effects of Eurasian integration can be clearly seen in Armenia. Since joining the EAEU in 2015, it has increased trade turnover with its EAEU partners 6 times, and its exports have grown 15 times. In fact, the EAEU countries have become the key partners of the Republic. And their specific weight in Armenia's trade increased from 27% to almost 40%. Mainly due to the development of relations with Russia.

And in general, the partnership within the EAEU helps Armenia to maintain high rates of economic growth. For example, the Republic buys raw materials from the Union at prices below the world average and thus increases the competitiveness of its exports. Armenian citizens work in Russia on the same terms as ours. And remittances from Russia already account for 5% of the country's GDP.

Another important point. The EAEU has a network of free trade agreements with Vietnam, Serbia, Singapore and Iran (temporary). This is a market of more than $900 billion with a population of almost 200 million people. Over the past 10 years, the population of these countries has grown by 11%, which is higher than the global growth rate. And GDP in absolute terms has increased by a third.

At the end of 2023, a full-scale free trade agreement with Iran has been concluded. We expect it to enter into force by the end of this year. Negotiations on the agreement with Mongolia have been completed. We plan to reach its signing by the end of the year. We plan to finalize negotiations with the UAE, Indonesia and Egypt.

Thus, we expand access to foreign markets, increasing the preferential sales market for allied, including Armenian goods from the current 480 million (CIS, Iran, Vietnam, Serbia) to almost 2 times (CIS, Iran, Vietnam, Serbia + UAE, Indonesia, Mongolia, Egypt).

As for our benefit - of course, it is the same more favorable conditions for entering the Armenian market, participation in major investment projects of the country and development of cooperation with reliable business partners.

- Armenian expert-economists say that with the restoration and development of former cooperation ties, Armenia could ensure even greater economic growth. Tell us, what are the ways for the development of Russian-Armenian relations?

Despite the external pressure, we continue to cooperate actively. About 60 large Russian business projects are being implemented in Armenia. And almost a quarter of them are in the sphere of high technologies and IT. There are many projects in other sectors that are no less important for us: mining, processing, construction. Russian companies have invested in Armenia in the mining of copper-molybdenum ores, in the production of aluminum foil. Thus, at the Agarak copper-molybdenum combine they extract and enrich ore up to 3.7 million tons per year. A major project is underway to develop railroad infrastructure in the South Caucasus.

The presence of such projects shows that there is interest in joint work. The main thing is to support it and maximize the potential of cooperation. Including through more active participation of Armenian business. Russian support tools are available for entrepreneurs: Project Finance Factory, Agreement on Protection and Encouragement of Capital Investments and many others. We expect that our partners will take advantage of this opportunity.

- The Center for Strategic Development (CSDA) has been working in Armenia for about two years. Its co-founder is the All-Russian Academy of Foreign Trade of the Ministry of Economic Development of Russia. What tasks does this center help to solve?

The Center for Strategic Development actively contributes to the development of Armenia's economy. Actually, this is its main task. For example, with the participation of the Russian Academy of Foreign Trade (VAVT), the Center's staff prepared proposals for Armenia on the use of public-private partnership in education, construction of industrial parks, creation of national development institutions.

We expect that the results of the research work will be used to develop strategies for the development of industries and sectors of Armenia's economy, including for improving the business climate and increasing our mutual trade.

In addition, the CSR actively works to strengthen bilateral contacts between the countries. For example, it has already co-organized several business missions of Russian enterprises to Armenia and provided Armenian business with its own platform for discussing issues on the bilateral trade and economic agenda. Now it additionally consults companies of our countries. There are already practical results in the development of recommendations on building efficient logistics routes, business processes, as well as corporate structure for several large Armenian and Russian producers and exporters.

- Last year you mentioned the sphere of high technologies and IT as one of the most promising areas for increasing the Russian-Armenian cooperation. How is it developing now, what projects are being realized, what projects are being discussed?

Cooperation in the sphere of high technologies and IT is developing especially fast. First of all, due to the activity of Russian business. For example, big players like Yandex.

First of all, almost all its services are represented in Armenia. These include Yandex Go, Delivery, Maps, Media Services and Education. Secondly, new projects are being launched, such as “Beyond ML”, which promotes B2B services and technologies in the country. Thirdly, Yandex is now training its own staff: Programming schools are already working in Vanadzor and Gyumri.

Smaller players are also ready to enter the Armenian market. For example, two years ago, a well-known Russian developer of digital information systems for business that aggregate data from different sources into a single, easy-to-understand dashboard came to the Republic.

All these processes are already having a favorable impact on Armenia's economy. Last year, the share of IT in the country's GDP grew to 7%, which is about $1.7 bln. This year, the volume of Armenia's information and communication technologies sector exceeded $1 bln.

Of course, the cooperation in the sphere of technologies and IT is not limited to the entry of our companies into the Armenian market. We are working on the development of digital solutions and their export through the Skolkovo Foundation.

Within the framework of implementation of the Interstate Program of Innovation Cooperation of the CIS Member States for the period until 2030, we have established cooperation with the Ministry of Hi-Tech Industry of Armenia, the National Center for Innovation and Entrepreneurship of the Republic “ImmagineHub by Soft”.

We are building up cooperation in the telecom sphere: we supply our colleagues with all the necessary equipment. In the near future, one of our IT companies is planning to get involved in the project on creation of charging infrastructure for electric vehicles in Armenia.

We expect that there will be more interesting joint projects in the future. There are all the prerequisites for that now.

- What is the pace of economic cooperation between the two countries? Have they been affected by the recent disagreements between Armenia and Russia? Is there a decline in any areas of cooperation?

Our countries have historically built strong economic, cultural and friendly ties. Therefore, despite emerging disagreements, we always find common ground in the end. Many issues can be resolved thanks to regular contacts between the leaders of our countries, Vladimir Putin and Nikol Pashinyan.

We do not see any evidence of decline. The inflow of our companies to Armenia has already been noted. If we look at the data on trade turnover, it is also only growing. And for the three previous years it has grown almost 3 times. The positive dynamics continues this year as well.

Russia, as always, is making every effort to ensure that our economic agenda is dynamic and rich and covers as many areas as possible. In the new realities, it is more important than ever for us to develop relations with trusted partners: to jointly solve the tasks of resolving bottlenecks in settlements and logistics. This is in the interests of the citizens and businesses of our countries.

- Russia traditionally ranks first among all countries in terms of investments in Armenia. However, now the interest of Russian investors in Armenia has weakened. In your opinion, what is the reason for this and how can this situation be normalized?

We do not see a decline, taking into account the gained rates of cooperation. As you said, Russia is the key investor in the Armenian economy. Today about half of the foreign investments in Armenia are of Russian origin. Moreover, the largest flow of investments from our side was recorded in 2022, amounting to more than 21.4 billion rubles.

According to the Armenian Ministry of Economy, the number of companies opened by Russians in 2023 alone amounted to 3400.

- In the fall of 2022, you stated that Armenia is one of the beneficiaries of Russia's economic readjustment. Can you tell us if there are any niches in which the positions of Armenian products and the volumes of their supplies have noticeably strengthened against the backdrop of anti-Russian sanctions?

From January to June of this year the supplies of textile products increased by almost 75%, machinery and equipment (consumer electronics, TV sets, telephones, computers) by 92%. In other words, our colleagues took advantage of the niches vacated in the market. We have increased sales of products traditional for our trade. First of all, fruits, nuts, precious metals, jewelry. These are the goods that are most in demand among Russians. The supplies of textiles and raw materials for the construction industry have also increased.

Knowing the quality of these products, we expect that Armenian suppliers will be able to gain a foothold in our market. And, as always, we are ready to support our partners.

Reprinted from https://am.sputniknews.ru/