ArmInfo.One of the most important problems facing the Armenian economy is a serious violation of the trade balance and structural imbalance of the economy.
On August 26, at a press conference in Yerevan, presenting the seventh economic study of the Eurasian Expert Club, Ashot Tavadyan, Doctor of Economics, Professor, Head of the Economic Research Center, member of the Eurasian Club of Experts, expressed the opportunities and challenges in Eurasian integration. The expert stated that the problem of unemployment and the migration caused by it is acute.
"First of all, economic relations with Russia provide real opportunities for solving these problems, which is directly facilitated by cheaper energy resources and real demand for Armenia's products. The widest opportunities in terms of prices for energy resources, as well as for strategic products of Armenia, are provided primarily by the leader of the EAEU - Russian Federation," Tavadyan noted, drawing attention to the fact that the EAEU has created additional opportunities for obtaining preferential loans, and, first of all, to strengthen the defense capability of the Republic of Armenia.
According to him, in contrast to a number of loans from international organizations, strictly targeted loans were received from Russia. He recalled that two preferential loans of $300 million are directly aimed at strengthening the defense capability of our country. At the same time, of course, the efficiency of using such loans is of key importance and the Armenian government is the one that should perform this function.
"Armenia has also received from Russia a target loan of $270 million and $30 million as a grant, necessary for the modernization and life extension of the Armenian NPP.
Two aspects of the measures - the abolition of customs duties and the reduction in prices for imported raw materials - certainly contribute to the growth of exports and the reduction of unemployment. Compared to world prices, significantly lower energy prices have a positive effect on increasing the competitiveness of local products. At the same time, there are still certain restrictions between our countries. Within the framework of EAEU, it is very important to further significantly reduce the restrictions. For that, it is also necessary to conduct a coordinated fiscal and monetary policy," the expert believes.
At the same time, Tavayan is convinced that the main task of economic security is to ensure stable economic growth and a significant increase in exports, which is especially important for countries with small economies.
"The formation of a unified regional economy involves not only the formation of unified management bodies and coordination of the actions of the countries participating in the Eurasian economic integration, but also the transfer of all national economies to fundamentally new tracks - their reorientation to indicators of aggregate GDP, to a coordinated macroeconomic policy, to the growth of exports, to a significant increase in the level of employment," the professor believes.
In this vein, he added that especially in the context of the sanctions against the Russia, the decision of the Supreme Eurasian Economic Council on the establishment of the EAEU Industrial Policy Council, the purpose of which is to harmonize the industrial policy of the EAEU countries and prepare proposals on strategies, directions and prospects for the development of the industrial complex of the EAEU, is important.
"To harmonize the policies of the EAEU countries, the agreement of the countries of the Eurasian Economic Union on the establishment of a commission on import substitution and industrial cooperation is very important. It is assumed that the new body of the Union will select the most promising integration projects in the integration sectors. The Armenian government should take the initiative and use new opportunities for growth in exports of finished products and cooperation with Russia, primarily in the military-industrial field," Tavadyan said.
In turn, Candidate of Economics, Associate Professor, Head of ASUE Economic Uncertainty Modeling Laboratory, member of the Eurasian Expert Club Aghasi Tavadyan stated that the Russian market is traditionally the key market for Armenia.
According to him, relations with Russia have a high potential to ensure the country's security, contribute to the growth of exports of finished products, and increase the level of employment.
"A limitation that prevents the free movement of labor in the internal market of the EAEU is the absence or insufficient legal regulation of pensions in the implementation of labor activities in other member states. A constraining factor in the formation of a common labor market is also the use of different pension systems in the member states. The main difference lies in the different approaches to the financing of the pension system and the distribution of pension funds.
In addition, pension systems differ structurally: in terms of retirement age, size, sources of pension contributions, and other parameters. It should be noted that the main purpose of the Treaty in terms of social and pension security is to form a mechanism that provides workers with the opportunity to fully realize the pension rights earned on the territory of the EAEU member states, regardless of which of these states they will live in the retirement period ", said the expert.
According to him, Armenia needs to formulate those critical tasks, without which it will be difficult to fully realize the potential of the integration agreement with the EAEU. Aghasi Tavadyan believes that the income level is the most important initial position in the integration process of the population relative to the countries that make up the integration group.
"Armenia ranks 4th in terms of per capita income. A key factor in the economic growth of the Republic of Armenia is the export of high value-added products. An important characteristic of the Armenian labor market is the high level of real unemployment, which remains at double digits. Approximately one out of every five economically active people is unemployed. This has also led to high labor migration.
An active migration strategy of the state in this direction is needed. A significant share of private consumption is accounted for by imported goods, including food. Remittances stimulate the consumer market, construction and service production. The state policy of exporting labor resources should regulate labor migration," the expert believes.
At the same time, according to him, in order to protect and support labor migrants, it is important to use the opportunities provided by agreements within the Union, and to negotiate the expansion of existing agreements in the direction of providing full-fledged social insurance, mutual recognition of educational diplomas, and the possibility of obtaining professional education on territory of the host country.
"The next challenge, which is a consequence of high labor migration, can be considered the situation with the country's trade balance. This situation can lead to significant pressure on the exchange rate and problems in the external sector related to financing the current account, since labor incomes of migrants directly depend on the migration policy of the host countries and the degree of legalization of migrants, while the receipt of grants and investments is very sensitive to the economic situation of donor countries. The imbalance of foreign trade is covered by remittances of labor migrants (70%) and external grants and investments (30%).
The development strategy of the Armenian economy should be based on the development of export potential in the few available growth points. Armenia's access to foreign markets is hampered by infrastructural and personnel obstacles, to overcome which it is necessary to use all possible means of regulating foreign trade and all the possibilities of the EAEU to integrate into the world economy, allowing Armenian producers to achieve economies of scale," Aghasi Tavadyan summed up.
