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The decrease in foreign trade, including exports, is due to a drop in re-exports, but this does not have any significant impact on the country’s economy, according to Armenian Minister of Economy Gevorg Papoyan.
In an interview with Armenpress, Papoyan added that the growth in Armenian exports to EU countries has become qualitative, with an increase in the export of finished goods.
Re-exports bring very little economic benefit, Papoyan noted.
He said that over $3.7 billion out of the $4.2 billion overall drop in trade volume is attributed to jewelry and unprocessed gold, while $185 million is platinum and $175 million is silver. “Meaning, nearly $4 billion out of the $4.254 billion decline is gold and some diamonds. The gold—unprocessed or semi-processed powder—is brought to Armenia and then re-exported to the UAE in the same form. Gold from Russia — in the form of ingots or sheets — is flown to Armenia by plane, reclassified by an Armenian company, and then sent to the UAE.
Does Armenia benefit from this? No, it doesn’t. Nothing is created here,” Papoyan said, adding that this is why the economy has continued to grow despite the decrease in foreign trade, as more than 95% of the $4.2 billion in trade did not contribute to the Armenian economy.
“This is why these figures have dropped so much, yet the economy grew by 5.6%. Tax revenues are growing at double-digit rates, tourism is growing at double-digit rates, and agriculture is also growing at a fast pace. This gold trade has given nothing to Armenia. On the contrary, it creates significant risks for our economy. Had it continued, we could have faced various sanctions,” Papoyan said.
Speaking about the government’s support program for businesses exporting to EU countries—specifically, the compensation of customs duties—the minister praised the project as a success.
“The program wasn’t simply about exporting to the EU. It was about exporting finished goods to the EU,” Papoyan said, adding that in January–June of this year, exports of finished food products increased by 56%.
A 20% growth was recorded in beverage exports. Papoyan stated that the industry is expanding as a result of this export growth.
Despite a 1% decline in exports of light manufacturing goods, the minister expressed confidence that the data for July and August will show significant growth in textile exports, noting that many businesses have already applied for customs duty compensation.
“This program is working very well. This year’s export growth to the EU is a qualitative one,” he said.