Monday, December 4 2023 17:47
Naira Badalian

Politics mixed with economy at Upper Lars checkpoint - Gagik Makaryan  

Politics mixed with economy at Upper Lars checkpoint - Gagik Makaryan  

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.  

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