Export diversification and boosting domestic production can  compensate Armenian businesses for their financial losses, expert  says

ArmInfo. It is first of all export diversification and boosting domestic production that can compensate Armenian businesses for their financial losses caused by the Russian  rouble depreciation, Gagik Makaryan, President of the Republican  Union of Employers of Armenia (RUEA), told ArmInfo. 

"The losses our producers and exporters are sustaining as a result of  the rouble depreciation are obvious.  And some exporters have  responded by suspending exports to Russia and are now waiting for  more favorable conditions. This is a grave problem as our exports are  paid in roubles. And it is not for the first time that our exporters  have faced such a situation in Russia," he said. 

The international sanctions against Russia caused a rapid  depreciation of the Russian rouble. According to the latest data, the  buying and selling rates are AMD 4.70/RUB 1 and 5.70/RUB 1 in Yerevan  against the respective AMD 6.20/RUB 1 and AMD 6.4/RUB 1 before  Russia's "special military operation in Ukraine." 

Mr Makaryan believes that the RUB depreciation could also affect the  prices on products imported to Armenia. In this context he points out  the need for Armenian importers to take advantage of the available  opportunities, in which case the situation in Armenia's domestic  market can be improved greatly due to products purchased in Russia  for roubles, which, in turn, will to a certain extent compensate  exporters for their losses.    

Mr Makaryan also spoke of more serious negative consequences of the  Russian rouble depreciation. This is first of all a blow to labor  migrants who transfer part of their money to their families living in  Armenia, and their purchasing power will seriously be affected. The  result will be new causes of widespread poverty, especially in rural  areas, to say nothing of the "multiplicative effect" of money  transfers on Armenia's economy and general economic activity in the  country. 

"In any case, it is high time for us to start serious work to  diversify our sales markets. It is not for the first time that we  have had rouble-related problems, and we are 'doomed' to  diversification - and of not only exports, but also of our entire  economy. In question is establishing local production of some goods  to reduce import substitution. We need to thoroughly analyze our own  sales markets and expand them in the directions we have not so far  even thought of - the Arab world, China, India are some of them," Mr  Makaryan said.