Friday, May 10 2024 20:30

ArmInfo.Trade in the Caucasus and Central Asia region could triple and distances could be cut by  half or even a third if certain changes are made, which requires political will. Mr. Alkis  Drakinos , Director, Regional Head of the Caucasus for the European Bank for Reconstruction and Development  (EBRD), stated on May 10, during an event held in Yerevan within the framework of  the IMF "Perspectives of Regional Economic Development" report.

He stressed that countries need to talk more openly with each other,  and basic agreements are needed to unblock obstacles, infrastructure  and border crossings. "All this should be ensured to increase  turnover, to integrate economies with each other and bring them to a  normal course in the context of the global economy," the EBRD  regional director said.

In general, noting that much remains to be done to integrate the  economies of the CCA region, Mr. Drakinos also touched upon existing  obstacles. In particular, he stressed that low-hanging fruit should  be picked first to ensure continued growth.

According to Mr. Drakinos  one of the obstacles to integration is the  objective difficulties in intra-regional trade. The region is huge,  and in order for intra-regional trade to take place, one should show  interest in it, which is not always observed. He also pointed out  geographical difficulties and structural problems in the development  of such integration.

"The economies of these countries are not very diversified. There is  a lot of export and trade in raw materials, but not much added value  in the region. Each country has its own characteristics, but none is  independent," Mr. Drakinos said. In this vein, he emphasized the  importance of diversifying economies, noting that CCA governments  should achieve this, including through the use of subsidies, although  he himself is not a proponent of them. "This is needed as an impetus  for further growth," he said.

The countries of the region differ in terms of the structures of  their economies, but, according to the head of the EBRD in the  Caucasus, there are many areas where they should consider serious  opportunities for cooperation and take advantage of this potential.  "To achieve this goal, political will should be shown, and  international financial institutions should take on the role of  catalysts, and the banking sector should provide support in the  development of the private sector. In these areas we should trust  market mechanisms.  You can always aim at the EU, but the EU is far  away, and your neighbors are nearby, close. Maybe it's cheaper to  deal with them, it's almost like the internal market," Mr. Drakinos  emphasized.

The EBRD is the leading institutional investor in Armenia. The Bank  has invested over E2 billion in more than 200 projects in Armenia,  supporting private sector development and the transition to a  sustainable, green economy.

Notably, the Bank recently improved its forecast for Armenia's GDP  growth for 2024 from the previous 4.5% to an updated 5%, expecting  these rates to be maintained in 2025.