Armenia will eventually benefit from its recent accession to the Russian-led Eurasian Economic Union (EEU) despite increasingly suffering from knock-on effects of Russia’s current economic troubles, according to President Serzh Sarkisian.
In an interview with the Russian TV channel Rossiya-24 aired late on Monday, Sarkisian insisted that membership in the EEU opened up “good prospects” for the Armenian economy. “We are becoming part of a 170 million-strong market and that is a very good achievement for a small country like Armenia,” he said.
“The functioning of the EEU, based on uniform, transparent and civilized rules, will only help to improve the well-being of our people,” he added.
The economic situation in Armenia has actually worsened since the country formally joined the EEU in early January. Recent months’ dramatic depreciation of the Russian ruble has sharply reduced the real value of vital remittances from scores of Armenians working in Russia. It has also hit hard Armenian exporters of agricultural products and beverages traditionally oriented towards the Russian market.
The World Bank said last week that economic growth in Armenia this year will fall far short of a 4 percent target set by the Sarkisian government in late 2014. The head of the bank’s office, Laura Bailey, forecast a 2015 growth rate of only 0.8 percent. She warned that even this projection could prove overly optimistic in case of a deeper-than-anticipated crisis in Russia.
Sarkisian acknowledged the fallout from the Russian recession. But he would not say just when Armenia can overcome it and draw significant benefits from the EEU membership.
Speaking in Yerevan on March 31, a senior official from the EEU’s Moscow-based executive body argued that Armenia would have suffered from Russia’s current woes even it had not joined the EEU. Tatyana Valovaya said the trade bloc is a long-term project that will eventually prove beneficial for the South Caucasus state.
Russia and the EEU’s two other founding members, Belarus and Kazakhstan, accounted for less than a quarter of Armenia’s foreign trade in 2014. Many observers in and outside Armenia believe that Sarkisian’s unexpected decision in 2013 to join the bloc primarily resulted from strong Russian pressure, rather than economic calculations.
In an April 1 report cited by Reuters, the World Bank forecast a protracted recession in Russia, citing the impact of Western sanctions and low oil prices. In its baseline scenario, the bank expects the Russian economy to contract by 3.8 percent in 2015 and a further 0.3 percent in 2016.It considers Russia’s medium-term growth prospects to be dim.