ArmInfo. It's too early to assess the economic benefits of the Trump route (TRIPP) or of grain supplies to Armenia through Azerbaijan, according to economist Ashot Farsyan, a member of the "In Our Way" movement.
Speaking about the effectiveness of the TRIPP route through Syunik (a 42-kilometer road in southern Armenia, the management of which will be transferred to a US management company for 99 years - Ed.), Farsyan expressed confidence that from a purely economic perspective, its impact on the Armenian economy will be insignificant. To support his assertion, he noted that Azerbaijan has already announced plans to transport 5 million tons of freight per year along this route. Farsyan suggested considering the route's profitability based on its ability to transport 10 million tons.
"Even in this case, the economic impact will be modest, given that the route is only 40 km long. To estimate Armenia's potential income from this route, one can compare it to freight transport through Georgia to Russia, where Armenia pays $6 per ton. Thus, at a rate of $6 per ton, revenue could range from $30 to $60 million. This is not an amount that could significantly impact the country's economy," the expert clarified.
Farsyan noted that Armenian authorities are trying to create the impression that this route will become part of the so-called Middle Corridor, which will transport freight from the Greater East to the West. "However, given the geographic features and the presence of the Caspian Sea with its port issues, this seems unlikely. For instance, the Kazakh port of Atyrau has already reached the threshold of bankruptcy (due to the shallowing of the Ural River estuary - Ed.)," the economist said.
On the occasion of the first grain shipment arriving to Armenia via Azerbaijan, Farsyan noted that alternative transportation routes are always beneficial. However, he also pointed out that the current media coverage surrounding this shipment has been somewhat exaggerated. "It's unclear which route is being used: through Russia and Georgia or via the Caspian Sea. The price issue also remains open: although it is claimed that Kazakh grain is cheaper than Russian grain, there is no actual data for comparison," the economist noted.
Farsyan pointed out that the price of bread in Armenia is currently 20% higher than in Georgia and Azerbaijan. "However, it's important to keep in mind that bread accounts for a small share of the consumer basket, and this 20% is determined by more than just the price of grain. The price of wheat accounts for only 50% of the price of bread, excluding transportation costs, electricity, and labor. Therefore, it's premature to claim that the new route will lead to lower prices for bread and other goods. It seems that the deliveries are being made more to demonstrate that the roads are being unblocked," the expert emphasized.
Farsyan also addressed security issues, pointing out that no risk assessment has been conducted yet. He clarified that these risks can vary, as security is not only about military threats. The member of the "In Our Way" movement found it difficult to determine the real economic impact of unblocking the roads, but expressed confidence that there would still be risks involved. "Currently, no studies have been conducted on these issues, and it would be appropriate for the authorities to focus specifically on these issues," Farsyan concluded.
