By Atom Markarian
The reopening of the Turkish border would do little to accelerate Armenia’s economic development and reduce its geographic isolation, according to a study commissioned by the Armenian government. The study released on Monday was conducted by the Armenian-European Policy and Legal Advice Center (AEPLAC), a research center funded by the European Union. It concludes that positive effects of an open border with Turkey would be negligible for the Armenian economy, especially in the short run.
The AEPLAC’s executive director, Tigran Jrbashian, said he and other local economists used “mathematical methods” to thoroughly research the subject and arrive at that conclusion.
“We can live without that border,” one of them, former Economy Minister Armen Yeghiazarian, told a seminar in Yerevan last week. He argued that Yerevan, which has long been demanding the lifting of the Turkish embargo, should therefore not rush to make political concessions to Ankara.
The AEPLAC analysis contrasts with the opinion of Western donors and some members of the Armenian government, notably Transport and Communications Minister Andranik Manukian. He has argued that an open border would, among other things, restore the Turkish-Armenian rail link and give Armenia an attractive alternative to importing and exporting goods through the Georgian railway.
Over 90 percent of Armenia’s external trade is carried out through Georgian territory and Armenian officials and business people complain that the transit fees charged by the Georgian authorities are disproportionately high. Manukian believes that the lifting of the Turkish blockade would force the Georgians to considerably cut those tariffs.
According to U.S. State Department estimates, the closed frontier as well as the absence of rail communication with the outside world increases transportation costs by at least 30 percent. World Bank economists, for their part, have suggested that its reopening would dramatically accelerate Armenia’s economic growth.
The AEPLAC study admits that much of Armenia’s trade with Europe and the United States would be handled by Turkish ports in the event of an open border. Nonetheless, it
claims that Armenia would save only $20 million a year as a result.
The study also puts the current annual volume of Turkish-Armenian trade at just $2 million, far below the government figure of $40 million. Turkish businessmen advocating unfettered commerce with Armenia estimate bilateral trade at $120 million and believe it will skyrocket once Ankara ends the 12-year embargo.