The creation of a free economic zone in Yerevan will promote the Armenian jewelry market not only at home, but also abroad.

Though exports of Armenian jewelry have gone up in recent years, they still don't compare to what the free economic zones of Dubai and Istanbul have accomplished. Such a tax-free zone in Yerevan would not only entice jewelry manufacturers in the Armenian Diaspora to come trade in Armenia, but also use the potential of Syrian-Armenian jewelers in the country. 

After a few years of negotiations, the decision to create a free economic zone in Yerevan for jewelry is finally ready. The Government of Armenia will discuss the matter of giving permission to AGA Free Economic Zone CJSC to create a free economic zone at its February 27 meeting.

AGA Free Economic Zone CJSC's founder and owner is Moscow resident, businessman Gagik Gevorgyan (photo), who is known as being the owner of major Moscow jewelry manufacturer Estet Jewelry House. Gevorgyan is also the president of both the Armenian Jewellers Association and the Russian Jewelers Guild. In recent years, he has been making a great effort to create a major jewelry center in Yerevan, but on the condition that jewelry will be tax exempt. According to Gevorgyan, only then will it be possible to unite the enormous potential of Armenian jewelry manufacturers, which is currently scattered over the entire world, in Armenia. 

After a process lasting several years, the Armenian government made concessions, agreeing to create a free economic zone in Yerevan for jewelers, goldsmiths, and watchmakers. The corridor will be in Hrazdan canyon, in the former AviaComplex factory building. The space belongs to AGA Holding, the founder of which is Football Federation of Armenia President Ruben Hayrapetyan, from whom Gevorgyan purchased the property rights. In general, location is of great importance: since this will be an international center, it must be close to the airport and all other necessary infrastructure (hotels, banks, restaurants, and so on).

The free economic zone must have production areas, trade points, exhibition conditions, fireproof storage, office spaces, and so on. That is, this is a huge complex that includes the entire chain of production to sale. Such centers exist in Dubai and Istanbul, and many Armenian jewelers are included there. In a short period time, these centers have become regional jewelry hubs — while Armenia, having ancient jewelry traditions, cannot even get regional significance.

This way, Yerevan is throwing down the gauntlet to Istanbul, taking into consideration the Commonwealth of Independent States market (the Customs Union), as well as being able to use the potential of Syrian-Armenian jewelers. If the activity of the free economic zone gathers momentum, the many jewelry manufacturers in the Armenian diaspora their business to Armenia (currently, US and European companies prefer the free economic zones of China and India). Already about 15 major jewelry companies in the diaspora have leased an approximately 10,000-square-meter space in the Yerevan zone, including Lebanese, American, Russian, and Turkish companies. The monthly rental fee per square meter of production space is a maximum of $20 — compared to $33 in Istanbul and $75 in Dubai. 

According to the proposed business plan, the building conditions of the free economic zone will be ready in 2015 — provided there will be about $10 million in capital investment. Included in the planning stage are about 120–150 companies, 2000 jobs, and exports of $200–250 annually is ensured. 

In 2013, there was great stride in the jewelry business in Armenia. According to customs statistics, 640 kg of jewelry with a total value of $22 million was exported from Armenia in 2013 — nearly doubling the figures from 2012. A major consumer of Armenian jewelry is Turkmenistan, which accounts for nearly 45% of Armenia's jewelry exports. In general, Central Asian states have great interest in Armenian jewelry — Kazakhstan and Tajikistan are also major importers.

One might even argue that Armenian jewelry is currently directed toward the Central Asian market and greatly depends on changes in the demand of that market. About 12% of jewelry exported from Armenia goes to Russia, but it's possible that presence in this market is further pronounced after the free economic zone is established in Yerevan. Armenia practically has no jewelry exports to European countries, while in 2013, there was some demand to the US market: Armenian jewelers were able to export about 25 kg of jewelry (previously, jewelry exports to the US were practically nil).