Page 36 - bneMag April 2022 Russia living with sanctions

36 I Southeast Europe bne April 2022
The border has been closed since 1993.
Armenian businesses see both opportunity and threat from opening of Turkish border
business stands to suffer from the heightened competition.
Armenia-Turkey trade is already heavily one-sided – in 2019, bilateral trade amounted to $270mn, all but $2mn of which was Turkish imports to Armenia. But the Amberd report found that Armenia does have export opportunities in the other direction. Armenia now exports raw fur, leather and scrap
metal to Turkey, and could export more products, including animals and freshwater fish.
“However, when building economic relations with the neighbouring country, the main risk concerns Turkey’s cheap and high-quality agricultural and industrial products, which may flood the Armenian market. In this regard, it is very important to take into account the issue of Armenia's food security,”
the report says.
Also complicating decision-making are the heightened emotions associated with Turkey, and the deep political polarisation in Armenia. In 2020, Armenia suffered a devastating military defeat to Azerbaijan, which was heavily backed by Turkey. That exacerbated Armenians’ longstanding fears of Turkey – which committed genocide against ethnic Armenians in 1915, something which Ankara continues to officially
Arshaluis Mgdesyan for Eurasianet
As Armenia and Turkey progress on normalising relations and opening their shared border, businesses in Armenia are watching the process with a mixture of fear and anticipation.
While some businesspeople see the opening of the Turkish border as a step toward gaining access to foreign markets, others worry that they will drown in a flood of cheap, relatively high-quality Turkish products.
Armenia’s National Security Council recently commissioned a study, “Opportunities and Challenges for Turkey’s Lifting of the Blockade of Armenia,” from the Amberd Research Center of the Armenian State Economic University. The study has not yet been published but some of its conclusions were made available to Eurasianet.
According to the report’s projections, opening the border could increase Turkish exports to Armenia by 65%, and increase Armenian exports the other way by up to 42%. While the report notes that opening would reduce logistics costs and enable
www.bne.eu
access to new markets, it concludes that the risks to Armenian industry are “very high” and that competition with cheaper Turkish goods is “a matter of national security for us.”
Turkish products have long been widely available in Armenia, but they must be imported via a third country, usually
“The border between Turkey and Armenia has been closed since 1993, since the first Armenia- Azerbaijan war"
Georgia. The border between Turkey and Armenia has been closed since 1993, when, during the first Armenia- Azerbaijan war, Turkey unilaterally shut it to protest Armenians’ capture of Azerbaijani territory outside Nagorno- Karabakh.
The talks now are aimed at reopening that border, which would greatly facilitate bilateral trade and lead to even lower costs for Turkish goods. While Armenian consumers would benefit,
deny – which Armenia’s political opposition exploits, painting any direct contact with Turkey as treason.
A recent survey found that 90% of Armenians see Turkey as their country’s greatest political threat, and 68% as its greatest economic threat. Asked about how they saw the possibility of open borders and renewed transport ties
with Turkey, 35% saw it as definitely or somewhat positive, while 53% perceived it was definitely or somewhat negative.