YEREVAN, DECEMBER 6, ARMENPRESS. In order to solve the logistic problems of exporters and the issue of queues in the Upper Lars border checkpoint, the government of Armenia is taking actions to establish regular air cargo transportation, in addition to the ferry communication. Preliminary talks are underway with partners, the Russian side is also interested in the matter. The government is also taking steps to provide exporters with an opportunity to enter new markets, Deputy Minister of Economy Narek Teryan said in an interview to ARMENPRESS, speaking about the problems faced by Armenian exporters, and the export from Armenia.

- Mr. Teryan, in the first 9 months of this year the export increased by more than 63%, comprising 3 billion 509 million 421 thousand dollars, and in terms of the 10 months the growth was 71.2%. What has mostly contributed to this growth?

- In the first 10 months, both export and import have increased equally. The volume of exports was ensured mainly at the expense of traditionally exported goods, including ready-made food, products made of precious metals, diamond, as well as goods which were not exported in the past. Of course, the current geopolitical situation had its impact. Our country managed to use the opportunities available. In this geopolitical situation the economic entities of Armenia are managing to take the right direction and enter, for example, the Russian market, which different other companies are leaving. And the big growth both in export and import is also associated with this.

- Minister Vahan Kerobyan expressed hope that Armenia will soon stop being a country exporting only mineral products. However, these products had the largest share in the export volumes of the first 9 months of this year – 785 million 398.5 thousand USD. How would you explain this?

- In the beginning, the mining industry was the driving force of our economy which had quite a big share both in the export and the economy in general. According to the government’s 2021-2026 action plan, we have outlined 5 priority sectors of the industry, which, in our view, have bigger growth potential, including export growth potential. These directions are light industry (textile), mechanical engineering, jewelry and diamond industry, pharmaceutics, chemical industry. At this moment we are concentrated on these areas, and the state assistance programs are directed also to these sectors. In particular, the export of light industry has increased by 16% in 9 months, and its share in the total export comprised 6.6%, compared to the 4.6% of 2021. The growth in mechanical engineering comprised 10.6 times, in jewelry and diamond industry – 2.7 times, chemical and pharmaceutical industry – 2 times. In other words, not only the mining industry has increased, there is growth also in other areas. The 14.5% economic activity growth registered in the first 10 months is a very balanced growth.

- What is Armenia’s target?

- Our target is to first of all develop the processing industry. We are concentrated on 5 areas as outlined by the government’s action plan. And we believe that the products of these areas have the greatest potential for export. We are implementing support programs for the development of these sectors, including the subsidy of loan, leasing interest rates for acquiring new equipment. This allows Armenian companies to raise productivity, make their products more competitive in the international market and increase the export volume. The companies, which have already used these programs, have opened new markets for them, not only the traditional, but completely new markets.

- What are the main directions of export from Armenia? What kind of new markets have been opened or could open in the future?

- The traditional export markets for us are the countries of the Eurasian Economic Union and China. However, this year our relations, our trade turnover have developed also with Iran. Our businessmen are also considering other markets – Qatar, the United Arab Emirates. There is also a great potential of relations with India. We are currently taking actions that will allow our exporters to enter new markets. There are markets with few Armenian goods, and we need to develop these directions as well. Our target is not to have dependence on one particular market. In order to eliminate the current risks existing in the geopolitical situation, we need to diversify our export portfolio. There is a company producing solar power plants in Armenia, its production volumes are gradually growing, and their main export market is the United States. This is a good example.

- Mr. Teryan, the situation in Upper Lars is a major problem for exporters. In order to mitigate the problem, there were plans to launch a ferry communication, but, as we see, it is being delayed. But in any case, is there any concrete timeframe for that? What are the problems in this regard?

- Yes you are right, its launch was postponed for several times, it was firstly expected to launch in June, then in August. But we think that now we are at the final stage of talks with our Georgian partners, the operator of the Poti port. The sanctions against Russia create difficulties for the cooperation with the operator of the Poti port. The Poti port is managed by the Dutch company APM. We are currently agreeing over the terms relating to the product types, the permission of ship entry. I think we are quite close to the launch of the ferry communication.

As for the issue in the Upper Lars, it must be solved. There are already queues now as the Russian side has toughened the control measures after the explosion on the Crimea Bridge. Now the inspection of a vehicle lasts longer. But we are in constant touch with our Russian partners, we have an agreement that they will increase the number of the so-called X-ray equipment which inspects the cars.

I also want to note that in addition to the ferry communication, we are also engaged in starting regular air cargo transportation. We are at a preliminary stage, are discussing with some partners the terms that could be proposed to our exporters and importers. The Russian side is also interested in that. The main demand by air cargo transportation is for the goods which are transported to the Russian market. And the Russian market will be the first direction. Later we will move on based on the needs of the exporters.

- The issue of devaluation of dollar exchange rate remains a problem for exporters. What kind of support mechanisms is the government considering? How do you see the solution of the issue?

- We are aware of the problems faced by our exporters. And now, both with them and within the ministry we are thinking of support measures. But I want to note that according to the forecasts of economists, the dollar exchange rate against the dram will change in the medium-run, which will balance the situation.

- What other problems are the exporters facing now? What steps is the government taking to solve them?

- They are mainly the logistic problems and the problem with the exchange rate. Logistics is the most painful issue. We see several support options, including the opening of new directions. Iran can be a new direction for our businessmen. We also consider the launch of the ferry communication, within the frames of which the government will make a subsidy. There are also other state support programs which help the companies improve their financial situation. We have 71% growth in export in the first 10 months, despite the existing challenges. And if we solve these challenges, I think, our economic entities will achieve better results.

Anna Grigoryan