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Armenia’s integration with CU to raise its GDP by 4% a year additionally

January 17, 2014, 17:53 UTC+3 ALMATY
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ALMATY, January 17. /ITAR-TASS/. Armenia’s accession to the Customs Union (CU) and the Common Economic Space (CES) will yield positive effect for the republican economy: its additional annual growth is expected to reach about four percent, the press centre of the Eurasian Development Bank (EDB) says, quoting a survey entitled “Armenia and the Customs Union: Assessment of the Integration Economic Result.” The survey was carried out by the bank’s Integration Study Centre.

“The numerical analysis of the results of Armenia’s accession to the Customs Union showed that the integration process had stimulated additional annual growth of Armenia’s GDP by almost four percent,” the document says.

“It is noteworthy that the trading effect from the decline in Russia’s gas prices by 140 million U.S. dollars over a year is comparable to the GDP growth by 146 million U.S. dollars. This may enable Armenia to sign an association agreement with the European Union in the long term,” the document goes on to say.

The study’s authors are confident that Armenia’s integration with the CU-CES should be preferable irrespective of what economic development strategy the republic is going to choose: to expand internal demand or stick to export-oriented development. If Armenia becomes a full-fledged member of the Customs Union and the Common Economic Space, it will be able to find more efficient solutions to urgent socio-economic problems and will embark on path of sustainable and balanced economic growth.

Research analysts believe that entry into the common labor markets will be a key benefit for Armenia from joining the Commonwealth of Independent States.

“Currently, the republic receives 85 percent of all transfers from labor migrants working in Russia, which makes up 15 percent of Armenia’s GDP. The accession to the CES agreements will make it possible to raise the value of transfers by 40 million U.S. dollars a year,” the experts note.

The biggest and most promising infrastructure projects in Armenia that will involve investors from CES countries include the construction of a new nuclear power plant and implementation of other energy projects as well as construction of a railroad to Iran, the North-South transport route and the resumption of railway traffic with Russia via Georgia.

It is important that not only Armenia but also other CU-CES countries will benefit from the aforesaid projects because the creation and development of railway and bus transport routes via Armenia to South Asia and the Middle East will link those markets to the Customs Union states.

Established by Russia and Kazakhstan in January 2006, the Eurasian Development Bank is an international financial organization. The bank was created to promote economic growth in its member states, extend trade and economic ties among them and support integration in Eurasia. The bank’s member states include Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. The EDB’s authorized capital exceeds 1.5 billion U.S. dollars.

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