Reiterating Washington’s strong support for the Turkish-Armenian normalization, Yovanovitch said Armenia’s heavy dependence on Georgian transit routes carries an “enormous risk” that was highlighted during Georgia’s August 2008 war with Russia. The resulting disruption of vital cargo supplies to the landlocked country underlined the importance of having an open border with Turkey, she said.
“The benefits [of border opening], I think, are clear to Armenia,” Yovanovitch told a panel discussion in Yerevan on Turkish-Armenian cross-border commerce. “An end to geographic and economic isolation; expanded export opportunities, especially for the depressed communities near the border; opening of the new transport routes that would reduce transport costs; easier access to Armenia for Turkish goods; increased competition and choice for Armenian consumers, a higher quality of Armenian products … and new export routes for Armenian products.”
Armenian exporters would also gain access to the large Turkish market, continued the diplomat. “In addition, with Turkey and the European Union linked by a customs union agreement for trade purposes, an open border with Turkey would put Armenia on a border of Western Europe,” she said.
Yovanovitch also spoke of significant political and economic benefits of border opening for Turkey. “Turkish companies would have new export markets in Armenia, and by establishing operations here they could take advantage of favorable export tariffs to Russia and other CIS countries at the same time as they create employment for Armenians,” she argued.
The remarks reflect the view of not only the U.S. government but also the International Monetary Fund and the World Bank and other lending institutions. Senior IMF and the World Bank officials believe that a positive impact of border opening on Armenia’s recession-hit economy would be felt as early as this year.
Some Armenian political groups claim that cross-border commerce with Turkey would actually damage the domestic economy. They say it would flood the domestic market with cheap Turkish consumer goods and thereby hurt many Armenian manufacturers.
Yovanovitch found such concerns legitimate but said the Armenian government can minimize possible “short-term shocks” resulting from the normalization of Turkish-Armenian relations. “Opening the border between Armenia and Turkey will require adjustments,” she said. “But I’m confident that the long-term benefits to both countries and the region far outweigh any short-term economic impacts.”
Yovanovitch also stood by her view that most Armenians support rapprochement with Turkey. “In meeting with people all around Armenia and all segments of the society, my experience has been that while some may have reservations about the protocols or about specific economic consequences or some other issues, they are in general overwhelmingly in favor of restoring relations between the two countries and opening the border,” she said. “Nobody forgets the past, but most are also focused on the future.”
“They are concerned about their own prospects, about Armenia’s development and they understand that an open border would ease Armenia’s isolation, create economic opportunity and benefit Armenia’s children,” added the envoy.