Armenian export analysis
Export is one of the most important factors of the country’s economic growth. It is especially important for countries with small economies, as it enables entrepreneurs to increase production volumes due to the emergence of a large sales market, which in turn leads to economic growth. Export of Armenian products and export from Armenia, in general is of utmost importance for the development of RA.
The role of foreign trade in the country’s economy
As a rule, the governments of developing countries consider export promotion as the most important step in the process of economic growth. Let’s take a closer look at the mechanisms:
- Increasing productivity – demand arises, as a result, production capacities increase, which is beneficial both for manufacturers and for the state as a whole.
- The inflow of foreign currency – all international contracts are paid in foreign currency, which is necessary for imports, to solve problems of equilibrium of the balance of payments, to pay off external debt.
- Recognition of the country – meaning, in the international trade market, which increases the export of the country and, as a result, the above-induced processes also increase.
The export from Armenia, of course, works according to the same mechanisms as everywhere else. With the difference that there are some factors that both positively and negatively affect foreign trade.
Adverse factors
Consider the unfavorable factors that affect Armenia’s exports:
1. Territory – beyond the area, Armenia is a rather small country, located in a mountainous region, without access to the sea. These directly affect the amount of resources that can be exported.
2. Location – due to the geographical position of the country, there are some difficulties in transporting goods to other countries, which, of course, adversely affects the export of Armenia.
3. Military-political instability – the Artsakh conflict, both directly and indirectly, affects the economy and political structure of Armenia, which reduces the investment attractiveness of the country.
Favorable factors
Let us consider in more detail the factors that favorably influence the export of Armenia:
1. Armenian diaspora – not only trade relations with countries with the Armenian diaspora are ensured, but the most important factor is transfers (money transfers of migrants from abroad to the RA)
2. Membership in the EAEU – thanks to Armenia’s participation in the union and the creation of optimal conditions for trade and economic relations between member countries, Armenia’s exports have increased significantly over the past years.
In the first half of 2022, mutual trade with the EAEU countries increased by 52.5% or $1.7 billion compared to the same period of the previous year. Armenia’s export in this direction increased by 48.9%.
3. Trade with EU countries – about 26.7% of the country’s total trade is traded with the EU, making the EU Armenia’s largest export market. Especially in a positive way, trade relations between the countries developed after the revolution in Armenia in 2018, due to the sharing of the same democratic values, which only positively affects the image of the country and improves Armenia’s exports.
Armenian diaspora
Separately, it is necessary to consider, perhaps, the most important aspect in the country’s economy, which directly affects the export of Armenia.
Armenian Genocide 1915-1922 on the territory of the Ottoman Empire and the Karabakh conflict led to the movement of many Armenians to other countries. Thus, the total number of Armenians in the world is 10-15 million, while the population of Armenia itself is 3.5 million.
The largest number of representatives of the Armenian diaspora lives in the Russian Federation (2.2 million people) and the USA (1.4 million people); in France, Ukraine, Syria, Lebanon and Argentina – more than 120 thousand Armenians in each country.
As a result, foreign trade with these countries occurs in rather large volumes.
Moreover, in addition to the demand in these countries for Armenian products, there is also the phenomenon of transfers of remittances from migrants from abroad. And this is the most important factor for the Armenian economy, since in terms of their absolute values, the volumes of transfers are comparable to the volumes of Armenian exports.
Export of Armenia
The most exported goods from Armenia, in descending order:
• Ores and precious metals
• Tobacco products
• Alcoholic products
• Aluminum and products from it
• Items of clothing
• Fuel and oil
• Fruit
• Animal products
The most popular country for the export of goods from Armenia, as it has been for many years, is Russia (26%). Further, in descending order: Switzerland, China, Iraq, Bulgaria, Netherlands, UAE, Iran, India, USA.
Until 2022, Armenian exports were actively developing and increasing their volumes. This is connected both with the political system of the country, the conclusion of international treaties, and in general, with the popularization of Armenian products.
