David Ananyan on Crossroads of Peace project 

ArmInfo.  The poor development of the economic component of the Crossroads of Peacce  project promoted by the Armenian authorities increases the risk that the  initiative will be perceived as one-sided  and may not meet the  expectations associated with it, according to economist  and former  head of the State Revenue Committee of the Republic of Armenia David  Ananyan.

"At the beginning of September, during the summit of the Shanghai  Cooperation Organization (SCO), Armenian Prime Minister Nikol  Pashinyan once again took the opportunity to present the Crossroads  of Peace initiative. It was interpreted as a new communication  platform designed to connect the infrastructure highways of the  Black, Caspian, Mediterranean and Persian Gulfs, forming the basis  for economic integration and mutually beneficial cooperation. The  possibility of combining and harmoniously integrating the initiative  with the Chinese project "One Belt, One Road" (BRI) was particularly  emphasized.

Despite strong political support, including  clear statements  from  the PRC Chairman regarding Armenia's sovereignty, the initiative is  mostly viewed as a political and diplomatic symbol, rather than a  real economic opportunity," Ananyan wrote on his Facebook page.

According to the economist, from the point of view of economic  feasibility, the initiative faces a number of serious limitations:

1. Limited transit potential. Armenia's transit position, although  strategically important, is primarily symbolic in nature. It is  unlikely that transit cargo turnover through Armenia will exceed 2-3  million tons per year, while more than 20 million tons already pass  through Georgia, and about 2 million tons through Iran.

2. Low profitability. Transit, customs and service fees at the  specified volumes may generate an annual income of about 10-14  million US dollars. However, taking into account the costs of  infrastructure maintenance, security and labor costs, the net  economic effect is unlikely to exceed 3-5 million US dollars.

3. High capital costs. Preliminary technical calculations suggest  that a minimum  investment of 350-400 million US dollars is  necessary. This includes the restoration of lines, the construction  of customs checkpoints,  bridges and interchanges. However, these  costs do not yet take into account political risks, security risks  and other factors.

4. Lack of access to ports. Armenia will still lack direct access to  sea routes. Although providing access in Turkey (Mersin, Derzey) or  Azerbaijan (Aliyat) is theoretically possible, in the current  regional situation this remains impractical and hypothetical. In  reality, Armenia will continue to depend on the ports of Georgia  (Poti, Batumi) and Iran (Bandar Abbas).

5. Uncertainty of the return on investment. Economic modeling shows  that the period for a return on investment  will exceed 50 years at  best. Such a lengthy  timeframe contradicts international standards  for infrastructure financing.

"It is obvious that at this stage the initiative is more about  shaping Armenia's foreign policy image. It is presented as a  peacekeeping idea that can capture the attention of some  international centers. However, the weak elaboration of the economic  component increases the risk that the initiative will be perceived   as one- sided, failing to meet the expectations associated with it.

At the same time, there is a real risk of Armenia losing sovereign  control over some infrastructure facilities, especially if  communication links are primarily directed towards Azerbaijan and  Turkey,"  David Ananyan concluded.