Thursday, 23 November

Open Borders: Armenia’s Trade with Iran and Georgia



Armenia has open border with only two countries – Georgia to the north and Iran to the south.

As the below chart shows, Iran has stripped Georgia in terms of exports to Armenia, while the picture is more a mixed bag when it comes to Armenian exports to the two.

During the past seven years, Armenian imports from Iranrecorded their highest level in 2012 at US$219.4 million.

As for Armenian imports from Georgia, during the same period, they reached their highest level in 2013 at US$65.8 million.

The picture is different when it comes to Armenian exports to its two neighbors.

Armenian exports to Georgia reached a peak in 2012 at US$108.5 million.

Armenian exports to Iran, however, were at their highest back in 2007, at US$87.8 million.

Source: Armenia’s National Statistical Service


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Comments (4)
1. the economist23:08 - 29 September, 2014
These graphs are commendable and so are the data presented; however, Hetq, it would be a more ocmplete analysis if you explained the trends and the reversal. In other words, why?
2. Hetq09:47 - 30 September, 2014
Dear "The Economist"....might we suggest that those like yourself, who have some insight in the matter, fill in the background as to why these trends are taking place. We would welcome your input.
3. The Economist19:11 - 30 September, 2014
Dear Hetq, I would need to see a longer time series and a breakdown by goods and services. These figures should also be viewed in the context of how large the economies of Georgia and Iran are, respectively. The export figures to Georgia would seem more significant given that country's relatively smaller economy and population compared to Iran. Both Iran and Georgia should be considered natural export markets for Armenia, and the governments of the three countries can do a lot more to spur inter-state trade and investment, and cross-technology cooperation, much more than the signing of state protocols. Assuming your data series are accurate (the source is not identified), the more significant and possibly worrying inflection point is the sharp drop in exports to both countries from Armenia in 2012-2013. If this continues and we have confirmation of a trend, it would be a negative for Armenia's trade balance with these two countries. Armenia is already a large net importer of Russian goods and services. The trade balance is tilted in favor of Russia with Armenia as a net importer. The devaluation of the ruble will make Russian exports even more competitive in foreign, including Armenian markets, and this could have another negative impact on Armenia's trade balance with Russia. It is important for Armenia's government to have a coherent trade and industrial policy to spur exports. Given the Dram's competitive valuation relative to other key currencies (USD, EUR), this should be possible. The challenge is to have a coherent policy to spur exports to Georgia, Iran and Russia. There is no such strategic policy of the sort at the state level at the moment. The economy is largely a reflection of domestic production and consumption, with net exports being a tiny contributor, and here you have two important markets in close proximity where Armenian goods and services can be sold, including spending by tourists from Iran and Georgia which is recorded as an export. So as a practical step, let's be a little nicer to our neighbors with whom we have official open borders, and put aside our prejudices. Every Dram they spend in Armenia counts as an export.
4. Hetq08:00 - 1 October, 2014
The Economist - The source of the above data comes from Armenia's National Statistical Service. It was inadvertently left out but has now been corrected. We appreciate your input ans supplemental observations.
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