Problems of Armenia joining the Customs Union

Problems of Armenia joining the Customs Union


By Vestnik Kavkaza


After the statement by President of Armenia Serge Sargsyan that his country intends to join the Customs Union, representatives of the Russian government and the Eurasian Economic Commission are conducting talks to define the parameters of the process. Russian Premier Dmitry Medvedev has recently stated that Yerevan joining the CU is complicated because Armenia has no common border with the countries of the union.

The coordinator of the working group of the Center for the Study of Central Asia, the Caucasus and the Urals-Volga Region under the Oriental Sciences Institute of the RAS, Alexander Skakov, and the head of the Finance and Economics course of the Institute of Modern Development, Nikita Maslennikov,
told Vestnik Kavkaza about their views on the prospects of Armenia joining the CU.

Vestnik Kavkaza:
How long will the process of association take place? Will the union withstand the Armenian economy, as Russia is discussing reduction of the budget today?

Alexander Skakov
: It is a serious question. I think Russia will withstand it, because Armenia is a very small country, the population is not big. Integration ties between Russia and Armenia are quite strong, it won’t be a serious challenge for the Russian budget. As for how long it will take, the question is also interesting and difficult. The CU is not a developed organization, it is just trying to form itself. And there are serious problems. Today there are problems between Russia and Belarus. Such problems can occur further and there is no guarantee they would be overcome soon. So I think the point is not in Armenia, but in the development of the situation in the CU in general. Whether it can pass through these problems and turn into a real integration entity.

Vestnik Kavkaza:
What are chances of the CU becoming a serious organization?

Alexander Skakov:
I think it depends on the situation in Russia, first of all. If Russia’s economy doesn’t balance between recession and stagnation, the chances for the CU increase. If the situation in the Russian economy worsens, it will influence the CU's chances very negatively. The situations in the economies of Kazakhstan and Belarus are much less important. In Belarus the economic situation is tense, we know it well. In Kazakhstan it is better, but a lot depends on the raw character of Kazakhstan’s economy, as this negatively influences its prospects. There are many questions and unclear places.

Vestnik Kavkaza: How will Armenia joining the CU influence the union?

Nikita Maslennikov: Of course, it will improve the CU, make its construction more stable. Armenia is not the only candidate, and after the decision made in the republic it is most probable that Tajikistan and Kyrgyzstan will do the same. Then we can assume that by 2015-2016 the union will include six states. This means a more receptive market, not only the trade market, but also the capital market and labour market. So, the construction of the Customs Union, and later the Eurasian Economic Space, becomes more and more stable and gets more chances for successful development.

At the same time, there should be documents, accession rules, necessary procedures by mid-2014. It will mean real accession of Armenia to the CU. I think the step is positive both for the Union itself and the Republic of Armenia. We should take new deep steps in the sphere of integration. I think the presence of Armenia in the CU, with their economic potential, will speed up processes which are underdeveloped.

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