ARF Presents Report on Economic Consequences of Turkey-Armenia Border Opening

lokianhovannesianYEREVAN (Armenpress)—The Armenian Revolutionary Federation hosted a conference Tuesday at the “Kristapor Mikaelian” center in Yerevan to present the findings of a preliminary report conducted by the party outlining the economic consequences of the opening of land border between Armenia and Turkey.

Participating in the conference were members from Armenia’s five parliamentary factions, as well as prominent economists and strategists.

In his opening remarks, ARF parliamentary faction chairman Vahan Hovanessian noted that this report was not political in nature, but rather an objective study of the advantages and the disadvantages that would follow the opening of the border and the establishment of diplomatic relations.

He explained that the report outlines the economic, trade and social issues that may arise with the opening of the border and whether Armenia is prepared, through its economy, domestic resources and laws, to tackle the challenges.

Hovanessian said that the entire package will be presented to the president to serve as a basis for addressing this issue, adding that the ARF will introduce corresponding legislation emanating from the conclusions of this report beginning in September.

The report aims to lay-out and assess the main economic issues related to the opening of the border and come up with the desired steps to be taken by Armenia in that regard, according to Davit Lokian, who directed the research team.

The report also presents the economic structures of both countries with relevant comparisons, as well as an outline of the elements that impact production, trade and investment in each country. Conclusions and recommendations on each of those realms are also offered in the findings.

Lokian, who is a member of the ARF Bureau, said that facilities currently operating in Turkey are working to increase the potential for production and investment in that country. He explained that efforts to guarantee investments in that sector has been led by Turkey’s ExImBank, which has guaranteed, through loan and other programs, nine percent of the overall investment in Turkey’s production.

The ExImBank also provides guarantees on investment and production through various program and incentives.

Lokian also reported that there were 20 free trade zones within Turkey. These zones come with attractive incentives for production and it is comparably inexpensive to obtain the necessary permits to operate within these zones. This, Lokian explained, could pose a potential danger for Armenia as cheap goods and products produced in these zones begin to roll into Armenia.

He also described the nuances of intellectual property laws in both countries, noting that both Armenia and Turkey have weak mechanisms for protecting intellectual property rights. The laws in Turkey are unsatisfactory and there are no administrative structures that can effectively address that issue, Lokian explained, adding that there is a threat that the same elements can cross over to Armenia, which also does not have a strong structure for protecting and safeguarding intellectual property.

This would encourage the widespread exports from Turkey of products that have been produced with disregard to intellectual property principles and laws, he said, noting that the report recommends, among other things, the imperative to create effective structures within Armenia that deal with this issue.

The conference also touched on the agricultural and tourism sectors of both countries by outlining the advantages that each has in the various realms, such as incentives for production and development, taxation and the utilization of the actual potential within each sector.

Lokian said that Armenia must formulate its stance on the opening of the Armenia-Turkey border and develop a negotiating position by creating necessary reforms and a clear strategy to realize them in a comprehensive manner.

Lokian added that the research and report can not only hasten the Armenia-Turkey process, but can also serve as an important blueprint for reforming Armenia’s laws and infrastructure.

The Chairman of the Parliament’s standing committee on economy, Vartan Ayvazyan of the Republican Party, commended the report, describing it as an important tool. Armenia can use this report to assess the challenges and potential dangers for the Armenian economy, he continued, adding that it can guide the creation of mechanisms that will effectively address the myriad of economic challenges that will arise in the event of the border’s opening.

But the establishment of an economic framework to address the challenges discussed in the report will first need a resolution to more fundamental political issues plaguing the Armenia-Turkey negotiation process, according to the head of the “Politekonomia” Research Institute, Andranik Tevanian, who pointed to Turkey’s insistence on tying the resolution of the Karabakh conflict to the normalization of its relations with Armenia as the greatest roadblock to the process.

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