ArmInfo.A stable raw materials-based export development model has emerged in the Eurasian region (Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan).
The region's industry is characterized by: insufficient and uneven technological sophistication; export specialization in low-value-added sectors and import dependence in high-tech sectors; and insufficient industrial cooperation between countries for secondary value-added products. This is stated in the Eurasian Development Bank's (EDB) analytical report "Development Potential for High-Value-Added Industry in the Eurasian Region," which was presented today.
It is noted that Armenia, which ranks 57th among the world's catching-up industrialized countries, has demonstrated significant progress in increasing economic complexity over the past three years. Analysts expect Armenia to achieve a significant increase in export potential of around 25% over three years, which is still lower than Kyrgyzstan (28%) and Uzbekistan (26%). Armenia has an average import substitution rate of 13%, compared to Russia's 23%, and Kazakhstan and Uzbekistan's 16%.
Armenia's total industrial potential is estimated at $2.1 billion. Armenia ranks 57th in the Economic Complexity Index, with manufacturing accounting for 10.5% of GDP, or $2.7 billion. Medium and high value-added processing in manufacturing accounts for 6.5%. Stage 1 processing involves ores and copper concentrates (24% of the total), gold (8.2%), and ferromolybdenum (5.5%). In the 2nd stage of processing - cigarette production (10.4% of the total volume), alcohol (9.4%), aluminum foil (3.6%), cutting production (2.6%), jewelry (1.5%).
Armenia's priority industrial sectors with export potential include basic metals ($214 million), food products ($103 million), pharmaceuticals ($80 million), beverages ($38 million), computers and electronic equipment ($31 million), machinery and equipment ($31 million), other finished goods ($25 million), electrical equipment ($23 million), chemical products ($19 million), and automobiles ($17 million).
Priority sectors with import substitution potential include food products ($123 million), pharmaceuticals ($99 million), computers ($64 million), clothing ($63 million), machinery and equipment ($60 million), chemicals ($58 million), basic metals ($50 million), automobiles ($42 million), tobacco products ($33 million), and textiles ($33 million). The report states that the challenges of the current development model can be addressed through diversification of production and exports. The combined effect of increased exports, import substitution, and increased output, if the potential for development in the middle and upper processing stages of manufacturing is realized, will exceed $510 billion per year. The chemical industry (including pharmaceuticals), mechanical engineering (primarily transport, particularly automotive), metallurgy, and the food industry will make the largest contributions.
The Eurasian region's industry (which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan) is the largest economic sector, accounting for approximately 31% of the region's total GDP, equivalent to $834 billion in 2024. Manufacturing plays a key role within this sector, generating 44.2% of industrial gross value added, or approximately $368 billion (13.6% of regional GDP). Globally, the Eurasian region's manufacturing industry accounts for 2.2% of global value added in the sector. This correlates with the region's share of global GDP (2.4% in 2024).
According to the report, the share of medium- and high-value-added products in Armenia's manufacturing industry is approximately 7% of the Eurasian total, slightly higher than Tajikistan (3.5%) and Kyrgyzstan (2.5%). Russia ranks highest at 34%, Belarus at 22%, Kazakhstan at 17%, and Uzbekistan at 15%. Armenia's share of manufacturing in GDP is the lowest in the region at just 11%, followed by Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan, and Belarus.
The most industrially developed countries - Russia and Belarus - have a comparatively high share of medium- and high-processed goods (Russia ranks 33rd in the world according to the Industrial Competitiveness Index, Belarus - 56th). At the same time, smaller economies, such as Kyrgyzstan (115th) and Tajikistan (121st), produce virtually no high-processed goods, demonstrating the vulnerability of their industrial sectors. Common problems for most countries remain the low share of high-tech products in the structure of output and exports and insufficient export diversification. Export deliveries continue to be dominated by low-processed goods (first stage of processing) with low added value - semi-finished metallurgy, basic chemicals, petroleum products, etc. Together, these form the basis of the region's foreign trade, which keeps it on the periphery of global industrial expansion. Exceptions are isolated cases: for example, in Armenia and Belarus, a significant portion of exports already consists of higher-processed goods - this is facilitated by access to the capacious Russian market.
