Economist: EEU membership enabled Armenia to avoid $1bln losses

ArmInfo. The EEU membership enabled Armenia to avoid $1bln losses in 2015, Professor Ashot Tavadyan, Head of the Chair of Mathematical Methods in Economics of the Armenian State University of Economics, said during the Jan13 Yerevan-Moscow-Astana video conference "Prospects of EEU Integration.  Experts' views from Russia, Armenia and Kazakhstan".

"The matter concerns the opportunities created in Russia for labor migrants from Armenia following the country's accession to the EEU.  This made it possible to retain the level of transfers from Russia to Armenia, which considerably dropped as a result of the Russian ruble depreciation. The cancellation of customs duties for the Russian gas export to Armenia made it possible to save $150 million," the economist said.

He said the year 2016 will be rather complicated for the EEU countries if the EEU member states will complicate it themselves. The main domestic challenge, he said, is the lack of coordination of macroeconomic and currency policy of the EEU countries. The economist stressed that the Treaty on the Eurasian Economic Union envisages an inflation of no higher than 5%. He added that at the yearend of 2015, the inflation in Russia, Kazakhstan and Belarus exceeded 12% versus 3% in Armenia. Given that the import to Armenia is thrice as much as the export, this was achieved due to the Armenian Central Bank's interventions at the expense of increase in the country's national debt.

In this light, Tavadyan pointed out the need to take additional measures in the EEU countries to reduce inflation, which, he thinks, will boost the commodity turnover and facilitate implementation of the key requirements of the EEU Treaty.

The economist thinks that though it is early to speak of a switch to a single EEU currency, nevertheless it is still reasonable for the EEU countries to switch to other currency in settlements in the trade of strategic goods. He also believes the intensification of mutual settlements in national currencies will reduce the dollarization in the EEU.

On Jan 1, 2016, Kazakhstan assumed the chairmanship of the Eurasian Economic Union. President of Kazakhstan Nursultan Nazarbayev became the head of the Supreme Eurasian Economic Council. On February 1, ex-prime minister of Armenia Tigran Sargsyan will lead the Eurasian Economic Commission.