ArmInfo. European markets are not as open for our producers and exporters as the Russian market. For Armenian producers, especially start-up companies, it is much easier to launch export to Russia rather than Europe, Vardan Yeghiazaryan, Deputy Executive Director of the Export Insurance Agency of Armenia (EIAA) told ArmInfo.
The expert believes that volatility of the Russian Ruble and decline of the Russian economy has not affected the export volumes of the insurance market of Armenia. "In the period when the Russian ruble depreciated, thanks to the product of our company, it became possible to restrain currency risks, as banks consider export insurance as a pledge security and carry out factoring which helps neutralizing currency risks," Yeghiazaryan explained. By present, the company has provided more than 1 billion drams worth insurance guarantees, he said adding that exporters "need EIAA's services to sleep peacefully."
At the current stage, the expert said, the Russian market is stable, which has encouraged Armenian exporters to increase exports. Besides, the export procedures have been facilitated within the Eurasian Economic Union. Meantime, export to European countries is connected with a range of complicated procedures and requires more financial literacy.
"European markets are not as open for our producers and exporters as the Russian one," Yeghiazaryan said adding that Russia accounts for 50% of total export of Armenia, the remaining export is to Europe and U.S. There is a tendency of reorienting export flows to Russia.
Export Insurance Agency of Armenia Insurance CJSC was founded on October 23, 2013 by the decision of the Government of the Republic of Armenia within the framework of the export-oriented industrial policy. The Company provides insurance against the financial losses incurred as a result of non-payment for supplied goods by the Foreign Buyer or its Bank, which has a payment obligation under the Contract. The services offered by our Company are efficient solution for the control of export risks of our customers. EIAA is a fully state-owned company.
Experts of the National Statistical Service explain the reduction of export to Russia by 18% in 2015 with the crisis in the Russian economy, depreciation of the ruble by more than 50%. In the first half of 2016, foreign turnover of Armenia and Russia increased by 12.4% comparing to the first half of 2014 to USD599.6mln. Share of foreign turnover with Russia in total foreign trade of Armenia increased from 24.1% to 26.4%. Armenia exports to Russia mostly brandy and agricultural products (including fish and cheese).
By preliminary data of the National Statistics Service, in Jan-Sept 2016 the foreign trade turnover of Armenia amounted to 1724.7 bln AMD ($3588.1 mln); export - 621.4 bln AMD ($1293.1 mln), import - 1103.3 bln AMD ($2295 mln), with the unfavorable balance of foreign trade being 481.9 bln AMD ($1001.9 mln).
