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Armenia’s short-term benefit from joining Customs Union to stand at 4% of GDP

Large-scale investments in the transport and energy sectors will lay a basis for a long-term sustainable development of the national economy

ALMATY, September 5 (Itar-Tass) - Armenia’s short-term economic benefit from joining the Customs Union of Russia, Belarus and Kazakhstan might amount to four percent of its GDP, Yevgeny Vinokurov of the Eurasian Development Bank’s Integration Study Centre said on Thursday.

“Large-scale investments in the transport and energy sectors will lay a basis for a long-term sustainable development of the national economy,” he said.

According to Vinokurov, the bulk of Armenians support the idea of the country’s joining the Customs Union. As many as 67 percent of Armenian citizens take this idea positively, while only five percent are against their country’s membership in that union, he cited statistics.

As a member of the Customs Union, “Armenia will get access to the receptive and well-protected market of the Common Economic Space to sell its high value-added products,” according to the Bank’s press centre. “Increased exports will help the country solve its trade balance problems. After joining the Customs Union and the Common Economic Space, Armenia will be exempt from export taxes and gas prices will go down by 30 percent, from the current 270 to 180 U.S. dollars. Apart from that, another benefit for the Armenian economy might be the cancellation of the export tax on rough diamonds, which will increase competitive advantages of Armenian diamond cutting companies on the external markets.”

According to the Monitoring of Mutual Investments prepared by the Eurasian Development Bank’s Integration Study Centre, direct investments of the Customs Union member states in Armenia amount to 2.1 billion U.S. dollars, or 40 percent of the overall direct foreign investments in Armenia. Russia accounts for the bulk of such investments. These funds are sent to modernize key sectors of the economy, such as railway transport, gas transport systems, electricity generation, non-ferrous metallurgy, the banking and insurance sectors, cellular communications, internet and data transmission facilities.

Founded in January 2006, the Eurasian Development Bank is an international financial organization. Its founders are Russia and Kazakhstan. The Bank’s authorized capital exceeds 1.5 billion U.S. dollars. As of now, its member states include Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.

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