Armenia should import more goods from Russia, Kazakhstan and Belarus to avoid a major rise in the cost of living as a result of its forthcoming accession to their Customs Union, Prime Minister Tigran Sarkisian said over the weekend.
Sarkisian acknowledged that the much higher import duties enforced by the Russian-led bloc, contrasting with Armenia’s liberal trade regime, could push up the prices of many products sold in the Armenian market.
“We should change our orientation towards the Customs Union markets and, in that regard, give preference to goods and services produced in the union’s member states,” Sarkisian told an economic conference in Yerevan organized by the ruling Republican Party of Armenia (HHK). He did not specify which concrete items should be imported from the three ex-Soviet states, rather than the European Union or other parts of the world.
According to Armenian government data, Russia, Belarus and Kazakhstan were the source of just over a quarter of Armenia’s net imports in 2013 totaling almost $4.5 billion. Russian natural gas, wheat and other commodities accounted for much of the Customs Union imports. All three member states themselves are heavily dependent on imported industrial equipment and consumer goods.
The higher import duties are one of the main arguments cited by Armenian critics of President Serzh Sarkisian’s abrupt decision last August to seek membership of the bloc. The Armenian government has dismissed such concerns, saying that it has asked the union to allow it to continue levying existing duties from around 900 types of imported items. Prime Minister Sarkisian said on Saturday that negotiations on the matter are still going on.
The government has repeatedly said that it expects to complete those talks by May. Critics say the speed with which it is seeking entry into the bloc only proves that President Sarkisian’s decision was politically motivated and had little to do with economics.