Page 67 - bne IntelliNews monthly magazine October 2024

bne October 2024
Opinion 67
growth continued at 45.7%, with turnover reaching $7.3bn. According to Alexey Overchuk, the First Deputy Chairman of the Russian Government, at an intergovernmental commission meeting on economic cooperation with Armenia, trade turnover between the two countries could reach $14-16bn in 2024. Should this forecast materialise, Armenia’s foreign trade volume with Russia would increase eightfold compared to 2020.
According to Armenia’s National Statistical Committee, exports to Russia in 2022 tripled compared to the previous year, reaching $2.4bn. In 2023, this figure rose by 43.1%, hitting a historical high of $3.4bn. Between 2010 and 2020, the average annual growth rate of Armenian exports to Russia was 18.6%, while from 2020 to 2023, this rate sharply increased to 64%.
Russia’s share in Armenia’s total exports, which stood at 27% in 2021, increased to 40-44% in 2022-2023. This growth can be attributed to Armenia’s strategy of circumventing sanctions – the country imports goods from the European Union, the Gulf and Asia, followed by re-exporting them to Russia. In 2023, 14.7% ($499mn) of Armenia’s exports to Russia consisted of telecommunications devices, 11.1% ($378mn) were passenger cars, 7.39% ($250mn) were monitors and projectors, 2.54% ($86mn) were calculators and their parts, and 1% ($31mn) were vacuum cleaners. In total, 91% of Armenia’s electromechanical equipment exports are directed to Russia. Additionally, exports of nuclear reactors and mechanical devices to Russia increased tenfold, and exports of optical instruments and medical equipment grew fivefold. Exports of aircraft doubled, while exports of ships and boats increased eighteenfold, musical instruments thirty-eightfold, and works of art and collectibles 19-fold. Many of these products had never previously been exported to Russia.
Despite the EU’s sanctions against Russia, some EU countries continue to trade with Russia through Armenia. Notably, Armenia’s trade turnover with the EU increased 2.4 times
in 2023 compared to 2021, especially with countries such as Greece and Cyprus, where Armenian exports surged 39 and 24 times, respectively. This raises questions about the consistency of EU and US policies on sanctions against Russia when the very countries imposing these restrictions engage in trade through Armenia, effectively providing Russia with a “trade lifeline”, thereby indirectly supporting its actions in Ukraine.
At a press conference following the Antalya Diplomatic Forum on March 2, Russian Foreign Minister Sergey Lavrov stated that Yerevan had made a “deliberate decision” to pursue a course of deteriorating relations with Moscow. “We regret that the Armenian leadership has apparently made a conscious decision to consistently worsen relations with the Russian Federation, blaming Russia for everything that has happened with Nagorno-Karabakh. This is certainly not the behaviour of an ally. The Armenian leadership has decided to bet on extra-regional countries, which are courting Yerevan
and promising to help with all its problems, as long as Armenia ‘cuts ties’ with Russia and the integration structures created in our shared region. It takes political courage to admit that since 1991, Armenia has followed a fundamentally wrong course in relations with Russia. If this is the assessment of the entire Armenian leadership, based on the opinion of the people, then much in the Russia-Armenia relationship needs to be reconsidered,” Lavrov said.
Despite growing political tensions, economic cooperation between the two countries remains stable. While Lavrov’s statements were harsh, economic ties between Russia and Armenia not only persist but also show significant growth. The worse the external relations between Moscow and Yerevan, the greater the trade turnover.
In early June, Germany’s DW conducted an investigation and published its findings. It is known that, since January this year, in line with the 12th package of EU sanctions, a full ban
“Armenia serves as a transit point not only for the re-export of Russian products but also for the re-export of European goods to Russia”
on the direct import of non-industrial natural and synthetic diamonds and diamond jewellery from Russia to the EU came into effect. A partial European embargo on Russian diamonds processed in third countries was introduced on March 1, with the full ban taking effect on September 1. As DW reports,
gold is exported from Armenia under the guise of Armenian origin, although the country has never produced this metal in such quantities. In 2023, according to official statistics, Armenia exported $1.8bn worth of gold and $589mn worth of diamonds. Since the beginning of 2024, Armenia has already exported $2.5bn worth of gold and nearly $200mn worth
of diamonds. The processing of precious raw materials has increased by 31%.
Armenia serves as a transit point not only for the re-export of Russian products but also for the re-export of European goods to Russia. According to Armenian media, since 2022, Armenia has been supplying the Russian Federation with mobile phones, household appliances, and vehicles of European, US and other origin. Armenia itself does not produce these goods.
Nikol Pashinyan’s proclaimed “multi-vector” approach is
not limited to the re-export of sanctioned Russian goods to other countries and the transshipment of European goods to Russia. Yerevan is also diversifying its arms purchases. After harsh statements from the Armenian side toward Moscow,
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