ArmInfo.The situation at the Upper Lars checkpoint is a show of muscle on Moscow's part, which could be very costly for the Armenian manufacturer on the eve of the New Year holidays. At the same time, the economic authorities of Armenia themselves are insincere in communicating with the local producer, Gagik Makaryan, Chairman of the Republican Union of Employers of Armenia (RUEA), told ArmInfo.
On October 26, traffic on the Gudauri-Kobi section of the Mtskheta-Stepantsminda-Lars international highway was closed to trucks due to unfavorable weather conditions. On October 28, it was reported that about 1,600 Armenian trucks were waiting to pass through the Upper Lars checkpoint. About 800 of them were idle on the territory of Georgia - at the entrance to the checkpoint due to intensified laboratory control in recent days, as a result of which several dozen cars have already been returned to the Republic of Armenia. On October 29, commenting on statements by Rosselkhoznadzor about increasing violations in the supply of plant products from Armenia and reduced control on the part of the RA Food Safety Inspection Authority, Minister of Economy Vahan Kerobyan expressed bewilderment at the fact that "35 trucks were returned (to Armenia) throughout the year, and the same amount in two days. And this is in the case when no changes were made in the regulations or in the quality of the supplied products>. He stated that the Armenian Ministry of Economy, within the EAEU, convened an urgent meeting on the situation at Upper Lars.
"The situation in Upper Lars is due to objective and subjective reasons," notes Makaryan. The checkpoint has traditionally been a "weak link" due to constant traffic jams caused by bad weather and various political and economic misunderstandings between Yerevan and Moscow. "This time everything got mixed up: perhaps business entities did not follow all the food safety standards established by the EAEU regulations due to insufficient control in the economic sphere of the Republic of Armenia. It is also possible that once again, Moscow, in pursuit of its political gain, has decided to resort to a long-tested tool of pressure on the authorities with whom it has political differences. Or maybe she agreed to Ankara's request. However, the situation at the checkpoint was expected, and therefore there are a lot of questions for the government agencies of the Republic of Armenia, who lost their vigilance, and for the Inspection Body, which did not establish strict control over the implementation of the EAEU regulations, and which never stood up to protect the document issued by it. Officials have forgotten that a private owner cannot single- handedly resolve issues at the state level," the expert notes.
The fact is that the Federal Service for Veterinary and Phytosanitary Surveillance of the Russian Federation notified the state authorities of Armenia in advance, notes Makaryan. Russia periodically points out the presence of problems in the field of food safety in Armenia. Thus, from April 5, 2023, supplies of dairy products from Armenia to Russia were stopped on the initiative of Rosselkhoznadzor due to "poor state control and violations of restrictive measures on the Armenian side." The department then considered that Armenian milk processing enterprises use raw materials produced by Iranian enterprises, which are subject to restrictive measures. In mid-June, imports of dairy products were allowed under enhanced laboratory supervision. In March, the Federal Customs Service of Russia began to carry out control checks of alcoholic products, which was explained by the fact that batches of counterfeit cognacs were discovered. In October, customs officers switched to enhanced control. Now there are more pests in Armenian agricultural products - flowers, vegetables and fruits.
However, another warning for an unknown reason remained without due attention from the Food Safety Inspectorate and the Ministry of Economy. "Meanwhile, these structures should have reacted quickly - fly to a meeting with their colleagues, and not be surprised at "how this happened," hinting at some subtext of these developments. Do they go on business trips for various reasons?" Mr Makaryan asks.
Against this background, according to Makaryan, the insincerity of responsible structures, which, it would seem, in their public statements express concern about the situation, but do this in a very strange way, with an incomprehensible tone, is puzzling. Thus, they show that they either do not control the situation or are trying to imagine the situation in the light of uncertainty. "In any case, there is an insincere attitude towards their own business - they do not risk telling them that your product is of low quality, and for this reason they are returning it. Then another question arises - how they are certified, how they pass inspection checks or through our checkpoint. Or the authorities are hoping for chance, which is fraught with serious consequences for the exporter - during the most active period for business," he notes.
At the same time, the expert does not believe that the returned cars did not meet the established standards. After all, the business continues to operate on the same technologies as it did a month or a year ago. And, if agricultural products that are re-exported are returned, and this became known to Russian colleagues, then this is already an omission of the RA state structures, notes Gagik Makaryan.
"There are many problems in the Ministry of Economy: the leadership of the department is weak, with a low level of professionalism. In addition, despite the existence of legislative norms and requirements for risk management in the field of food safety, the Inspection Body does not conduct significant inspections due to a lack of personnel and knowledge," he says.
The head of the Republican Union of Employers of Armenia also touches on other, in his words, "serious omissions" of the Ministry of Economy in a number of areas: a year ago they imported chemicals from Europe, India and China, but they still cannot clear some of the products through customs, and enterprises cannot place orders for next year. A week earlier, Yerevan City Hall banned the entry of heavy trucks with a maximum weight of 2.5 tons (full weight plus maximum cargo weight) during the daytime. This restriction includes minibuses of the Ford Transit, GAZelle and heavier vehicles, which, accordingly, will be able to enter the center of the capital after 21.00 in the evening and until 7.00 in the morning. It turns out that manufacturers and suppliers, on the one hand, and the receiving party, on the other, must pay the employee additionally for evening work hours. They addressed the problem to the Ministry of Economy, but the department was unable to influence the decision of the capital's authorities, Makaryan points out.
According to him, the Ministry of Economy traditionally talks about diversifying sales markets, but is chronically silent about the need to expand the range and the certification process. After all, for example, to enter the markets of the Arab world, Armenia needs Halal certification. Last time the opening of the International Halal Certification and Standardization Center in Armenia was announced in June 2022 during a meeting of Halal Center specialists with representatives of the Armenian business community organized at the Armenian Ministry of Economy. Meanwhile, in March 2017, a solemn opening ceremony of the Iranian Halal certification office took place in Yerevan, and years earlier it was stated that the opening of the office would provide an opportunity for Armenian businesses to export their production to 57 Islamic states.
Moreover, the responsible government officials should have started taking measures yesterday in case of restrictions or closure of the Russian market for Armenian exporters. It was necessary to think about modernizing the economy. However, this is only mentioned in the state budget for 2024. <This will allow us to produce higher quality, high-tech products with a larger range, which, being more competitive, will allow us to enter not only the markets of the EAEU. After all, Armenia will not be able to conquer markets if it traditionally produces only mining products, alcohol, canned food, compote, etc. It is necessary to expand the range and stimulate innovation," says Makaryan. At the same time, the expert is convinced that Russia will not completely close the market for Armenian products, since, firstly, it is unprofitable for it, and secondly, it still hopes for Yerevan's loyalty.
According to Makaryan, today is politically and economically the most convenient time to request export quotas from the European Union. For example, at one time, when the Russian market was closed to Moldovan wines (in the early 2000s, their share in the Russian market reached 60% -ed.), the EU allocated them appropriate quotas. Otherwise, the ban would have brought the main industry of the Moldovan economy to the brink of disaster.
Nothing is being done through GSP, Makaryan adds. Meanwhile, Armenia enjoys GSP beneficiary country status with Canada, Japan, Norway, Switzerland and the United States. That is, Armenia is given the right to export about 3,500 goods of Armenian origin to the markets of these countries with zero or reduced customs duties. "But the Ministry of Economy could train brokers who would advise on export issues within the system, or help exporters export to GSP countries," he notes.
An alternative to the Upper Lars checkpoint could be the ferry service promised by the Ministry of Economy, but never used, from the Georgian port of Poti to the Russian port of Caucasus, the expert believes. The issues could also be resolved by creating a logistics center for air transportation. <You can transport cargo of 100 tons by air, that is, you can transport the cargo of several trucks on one aircraft. And, if the state also undertakes to subsidize transportation, this will significantly ease the burden of exporters and make it beneficial for everyone," notes Gagik Makaryan.
Thus, with desire and some work, potential sales markets for Armenia, according to the expert, can be both the markets of the Near and Middle East, GSP, and the EU. The Kazakhstan market may also be promising. "Despite the difficult logistics, products of Armenian origin will be welcomed in Kazakhstan," he notes.
"Officials paid from the taxpayer's pocket are dishonest in carrying out their official duties, and, accordingly, in solving the problems of the same taxpayers. The state does not have the right to wash its hands and leave business alone with the government structure of another country," concluded the head of the Republican Union of Employers of Armenia.