Wednesday, April 18 2018 13:51

ArmInfo. Relations between Armenia and Belarus have significantly intensified recently. Just the other day NA Speaker Ara Babloyan in St. Petersburg met with Chairman of the House of Representatives of the National Assembly of Belarus Vladimir Andreichenko, having discussed with him the broad issues of so-called parliamentary diplomacy. In recent months, the economic authorities of both republics have shown special activity in the relationship. According to the information periodically disseminated by the Ministry of Economic Development and Investments, as well as other agencies of Armenia, the parties are finding more and more areas and common interests in the integration of the economy. The need to resume close cooperation between the two countries that have long-standing ties in the industrial, technological and scientific spheres, it is said for a long time and now the impression is created that the ice has finally moved. The visit of the leadership of the Ministry of Industry of Republic of Belarus to Armenia, indicates an increase in investment interest of this country to the possibility of implementing joint projects. The ArmInfo Director General analyst Emmanuil Mkrtchyan addressed the Ambassador Extraordinary and Plenipotentiary of the Republic of Belarus to Armenia Igor Nazaruk about this, and what exactly is being done in the direction of economic integration of the two countries that are also under one umbrella of the EAEU.

 

Igor Vasilievich, judging from the flow of information from official economic structures, "the case is on the mend." In your opinion, how much is Armenia interested Belarusian supplies and, on the contrary, Belarus in Armenian, especially in the agrarian and industrial sector?

 

 

We have a balanced interaction with the Armenian side, including the development of bilateral ties in the agrarian sector. This is the supply of our intermediate products in the form of dried milk and other components, which are further used for economic purposes in Armenia. This is the supply of high-chemistry products. As you know, we have established the production of tires for cars at the Bobruisk Combine JSC Belshina. This is a very good product in the price-quality ratio. Earlier we produced only tires for specialized cars and trucks, now, in connection with the high demand for this product, including from the new Belarusian-Chinese JV CJSC "BELJI", which produces passenger cars of Geely brand, the demand for it has increased significantly. We started actively delivering it to the Armenian market, where our tires have an increased demand and, according to my information, our tires are approaching a 40% share in the local market. This is understandable, because the market needs a high-quality medium-priced segment, and therefore the consumer votes with his purse in favor of Belarusian products. Very soon, I hope, in the Armenian market there will appear also cars Geely, let out at us on a full cycle. Our factory is ready to produce up to 100 thousand units of cars. The main sales market is the countries of the EAEU. Armenia is an equal participant in the Union, and I am sure Armenia is listed in the plans of the marketing policy of this plant. We pin great hopes on this project in Belarus.

 

 

Belarus, as is known, produces quality and reliable buses. Information was received on the possible supply of bus equipment to Armenia to provide interregional routes.

 

I would like to note that the whole scale of urban, suburban and international buses with diesel, gasoline and gas engines, and even special buses for airfield support is produced in Belarus. We learned to do such ones. Our Armenian partners are very closely following the geography of supplies of this bus equipment, we are successfully supplying it to many countries, including Russia. It honestly served in the Sochi Olympics, and will work during the World Cup. This is not a one-time campaign, it's a reliable technique for the future. Armenia knows it, and we talked about this in the Ministry of Transport, the Ministry of Economy, and the Yerevan City Hall, where there are ambitious plans for a radical reform of both the capital and regional transport networks. We will interact with partners, and with the financial part that will support these contracts, including the opportunities of the Development Bank of the Republic of Belarus.

 

You are talking about Belarusian products, which best meets the price-quality formula. This is certainly true, but even your President has repeatedly noted that as long as the products reach the foreign consumer, it takes off in price, which limits its competitiveness. With this, as you know, is hard not to agree. Very many Belarusian goods sold in Armenia, especially machinery, cost twice as much as in Belarus, although our countries use the regime of the Customs Union within the framework of the EAEU.

 

You know, geography cannot be reshaped. We are well aware that the transport component in the price is great. We are now very carefully considering the issue, which is related to logistics, the delivery of our products throughout the chain.

 

We spoke with you somehow about the transport charges by the Armenian side. Have you solved this issue?

 

This question is still on the side of Armenian colleagues, because Belarusians do not charge Armenian carriers. This is laid down at the level of the Tax Code of Belarus in respect of vehicles of the EAEU member states that are not subject to road accruals in the territory of the Republic of Belarus. In Armenia, other legislation, and at the end of June last year, the Protocol to the Intergovernmental Agreement was signed, according to which the Armenian side agreed to amend the previous document and remove this road tax from Belarusian carriers. To our - Belarusians - unfortunately, while this document is under consideration of the RA Parliament, and parliamentarians today have many other tasks related to constitutional transformations, and hands to this document do not reach yet. We are sympathetic to this and hope that they will not forget about the Belarusian-Armenian document that will facilitate cooperation in the field of trade and transportation of goods.

 

This is important, if only because Armenia today promotes the idea of ​​participation in FEZ Meghri in all the countries of the EAEU. Is Belarus interested in this project, or do we still overestimate the opportunities of the free economic zone in Syunik? I personally think that our side is somewhat overestimating it. Any analyst who follows the economic policy of Iran, sees how the country takes huge steps on the path of import substitution. Recently, the President of Iran instructed all state structures and economic agents, one way or another related to the state, to purchase exclusively Iranian products for their needs, and allowed the purchase of imports only if the same products are not produced in Iran. Protection of the domestic market in this country is too rigid, not to mention a significant number of different import quotas.

 

It’s a long way from Minsk to Meghri, which means that, firstly, there should be good transport communications and there should be good conditions for transport to deliver goods. The first premise is just the signing of the agreement on transport cooperation between Belarus and Armenia, which we mentioned above. This will eliminate certain difficulties. The second part is a large-scale reconstruction of the North-South highway, which will allow more comfortable, more secure and, at the same time, more quickly deliver the components to Meghri. It would be nice if there was a railway - it is cheaper, it is not connected with any passes, and I think that this is a matter of the future and it is clear that such large-scale projects of one Armenia are not yet in force, partners are needed. I think that this issue will remain on the agenda of the EAEU. As for Iran's import policy, as you know, the Eurasian Economic Commission (ECE) is developing a free trade issue with Iran, and according to my information, the parties are full of expectations in the summer to sign this document. What the Iranian leadership says and does is one side, but we will have to be guided by international agreements. Therefore, I hope that with the signing of the agreement on a free trade zone with Iran, the FEZ regime in Meghri will work in full force, as it will be useful for all parties. How this investment project will be implemented - time will tell. It will be interesting for our enterprises to work directly with the future market, and Iran is a huge potential, it is 80 million population, this is a huge market, access to neighboring countries - Syria, Lebanon. It would be interesting to us here. But we will look at the economic conditions that will be created within the framework of the EAEU-Iran FEZ, since each investment project should be supported by the economy. We must clearly understand that the tractor assembled on the head conveyor of the Minsk Tractor Plant will still be cheaper than the tractor assembled in Vietnam, for example, but when we supply parts for assembly it is one scheme and when we deliver the finished product, the other. We must clearly compare this and see for each such project the economy.

 

Official information on the possibility of participation of the Belarusian side in the North-South highway project has been received. What specifically was the speech about, it is not said. Can you tell our reader? Logically, this is understandable, because in Belarus, of course has the best roads in the CIS. From personal experience I know that European ones are not inferior in quality.

Thank you for your appreciation of the quality of our roads. We invest a lot of resources in the transport suector, this also indicates the commitment of Belarus to open borders, because we understand, among other things, the high transit significance of our territory for foreign carriers. As for the "North-South" road, then no, we did not receive such an invitation and we were not involved even as a subcontractor. Although of course, I think that the Belarusian experience of building roads would be useful. Moreover, we at ourselves make all scale of road, motor transport equipment. It is reliable, easy to use and time tested. And again, inexpensive. As they say, a solid segment of proven technology. The reasons why we were not invited to participate in this project, I do not know, most likely considered this issue in the complex: the material and resource side, including the financial side. Unfortunately, we cannot provide a full set of all the components that are required momentarily and immediately to our Armenian partners. Yes, we have technology, machines, experience, human resources, but it's difficult to overpower it financially. Replenish this component with borrowed funds is cumbersome and inefficient.

 

I will try to specify the questions. You discussed several concrete projects with economic authorities. This is the creation in Armenia of joint machine and tractor stations (MTS) - a project extremely relevant for the development of our agrarian sector, the development of an agricultural education cluster through the creation of an agricultural college and, again, the possibility of creating joint livestock farms. How realistic are these projects?

 

All this was actually voiced during my personal contacts with Karen Karapetyan, the Prime Minister of Armenia, and with Suren Karayan, Minister of Economic Development and Investments of Armenia, and with other Armenian officials. The Armenian initiative is to create machine and tractor companies to serve the interests of farmers. A farmer can purchase some technique from the state support program, or simply rent it, as he does not always need it all-the-year-round and is used only for a limited season. The possibility of creating a joint MTS was also voiced during the visit of our delegation headed by Deputy Industry Minister Dmitry Korchik to Armenia. This issue is still being worked out. It is necessary that specialists engage in its economic elaboration, but we have the appropriate technology, technology and experience. Let's see how this project can be implemented in Armenia. As for the interaction around agrarian projects for livestock development, we, as you probably know, have tremendous experience in this area, and this experience we want to discuss with the Armenian partners and outline ways of implementation. In this regard, the Armenian side expressed its readiness to organize an agricultural college with a certain cattle-breeding bias on the basis of one of the educational institutions, our specialists will take part in the formation and work on the basis of our own technological solutions.

 

The government of Armenia has adopted a number of archival decisions that contribute to the technical re-equipment of the agricultural sector. These are state subsidies for the purchase of agricultural machinery and the facilitation of leasing operations. And in this regard, I want to raise the issue of the expediency of organizing a screw-driver assembly of small Belarusian agricultural machinery in Armenia, which has been said for at least ten years. I think the conditions for its successful sale in the country have already been created. How do you think?

 

I will explain. If we are talking about the assembly of small agricultural machinery, we must clearly understand that a break-even cost-effective assembly production starts from a certain volume, and if the volume is not enough, then there is no economic sense for this. Unfortunately, the currently available volumes of supplies of tractor and other equipment from Belarus do not yet provide economic reasons for setting up a cost-effective assembly production here. And this, in spite of the fact that your government has adopted a number of very interesting decisions on leasing for the economy, on a significant reduction in the debt burden for farmers - borrowers. But the main thing is that the volume of purchases of this equipment is already growing, it is encouraging. The market is gradually opening, and it is possible that we will return to this issue with Armenian partners when the business realizes that this project will be profitable, and inexpensive, reliable Belarusian agricultural equipment will be assembled in Armenia. It is also important that these products are sold not only in Armenia, but also in neighboring countries - Georgia, Iran.

 

May the Development Bank of the Republic of Belarus (BSRB) participate in such projects?

 

Actually, it is for this purpose that the bank's delegation plans to visit Armenia in the near future. The BSRB is a financial structure with 100% state capital, which is called upon to serve the most large-scale industrial and transport projects. The bank serves the state needs both domestically and abroad, finances large infrastructure projects. The Bank began discussing a memorandum of cooperation with the Armenian State Corporation for Development and Investment. The document will form the basis for further interaction of the parties with a view to servicing large bilateral projects.

 

Such, for example, how to modernize the elevator industry in Yerevan and other cities?

 

Including such as well. This is an interesting project, which we are discussing with the Yerevan Municipality. The elevator economy is almost completely worn out, and the degree of wear affects the safety of consumers - residents of high-rise buildings. Our enterprise "Mogilevliftmash", which produces the entire line of elevator equipment, is interested in this project and is ready to participate in the creation of the assembly hub production of elevators in Armenia with the prospect for adjacent markets, the same Georgia. By the way, not so much is needed for the initial launch of such an enterprise. Our specialists have already inspected several sites for the future organization of production, we were very much helped by the Minister of Economic Development and Investments Suren Karayan. The hitch is still in the legal sphere - how to adjust the issue between the owners of housing and elevator farms. We in Belarus have our own practice, which clearly works. Armenian partners need to resolve this issue.

 

Are you satisfied with the statistical dynamics in trade turnover between our countries?

 

Overall I'm satisfied, we have very good dynamics. In mutual trade, we have grown over the past year by 33%. This increase lasts month to month. You know, every planted sprout in this business has the right to a successful prospect, if you cherish it and take care of it. By the way, thanks to the Armenian government's program to support farmers and provide interest subsidies, we have grown very well in the delivery of our tractor equipment - 2 times. Imports of Belarusian furniture increased 6.5 times, drugs - 1.5 times, greatly increased in the supply of hosiery, those tights firm "Conte" too. And the supply of butter, dairy products - almost 10 times (!), Since our dairy raw materials began to actively acquire producers of whole-milk products. Import of communication equipment to Armenia increased 15 times, household refrigerators - almost 4 times. Grown up in the volumes of paper supply, auto parts, cables, including fiber optic. From Armenia to Belarus are vaccines, whey, the supply of fresh flowers to our market, fruit and vegetable products, wine, cognacs has increased. A lot of clay is imported to Belarus as raw material for our ceramic productions. Yes, trade and economic relations between Belarus and Armenia began to develop actively. Like melting snow, from which the water flows with brooks, making its way, so our partnership is gradually entering a qualitatively new long-term level. And it is very important today to create comfortable conditions for this. In general, I am impressed by the aspiration both at the level of your country's leadership and business circles to strengthen this our interaction, and this desire is sincere and mutual.

 

Tell us about the ecological project on green plantations on Lake Sevan. Is it an investment?

 

No, it is not an investment project. It is purely social, the project of Friendship, the Goodwill Project on the Belarusian side. Belarus is rich in forests, almost half of the territory of our country is a forest zone. We have tremendous experience in the area of ​​forest plantations, there are technologies, there are machines for planting trees. The project in Sevan is already being implemented. We supply here seedlings of coniferous trees that are planted in certain areas. Scientists of both countries - on our part these are the employees of the Research Institute <Forests> - they select the right types of trees for certain areas, so that trees can take root in natural conditions. The total area of ​​plantations will be about 10 hectares. Very soon this work will be completed, and we will solemnly open this green <Forest of Friendship>.