This article questions this claim. It argues that when Turkey opens the border, economic gains to the consumers, theoretically, could be positive; however its extent would be questionable. The article argues that open borders would hurt Armenian producers who could not compete with subsidized and protected Turkish products, that the open borders would cause just a modest increase in Turkish imports and finally, in order to generate economic development and reduce poverty, it is much more important for Armenia to implement domestic reforms than for Turkey to the lift the blockade.
1. Will Armenian consumers benefit when Turkey lifts the blockade?
The answer is maybe. Currently Turkish products are imported through Georgia. When Turkey opens the borders, Turkish products will be able to enter Armenia directly from Turkey and the transportation cost will go down. Therefore the Armenian businesspeople who are importing the Turkish products will be able to bring them to Armenia at a lower cost. Economic theory assumes that there will be competition among importers and the price of Turkish imported goods will go down. In this scenario the Armenian consumer will benefit; however the problem is that there is no guarantee that there will be competition among importers. There is the possibility that a few oligarchs might control the major imports through Turkey. In that case the Armenian monopolists will be able to keep prices at the same level and the benefit of lower transportation cost will go to the powerful rich importers, instead of the consumers. Therefore there is no guarantee that there will be consumer surplus and that consumers will benefit from open borders.
From around 2003 to early 2009 when the value of the Armenian money Dram (AMD) was going up and appreciating, economic theory predicted that the prices of imported goods in AMD will go down. However the AMD prices of many imported goods did not go down or their decrease was insignificant; therefore the benefit of appreciated AMD went to the powerful rich importers, instead of the Armenian consumers and the poor. Armenia could experience the same, when the borders with Turkey are opened.
2. The lifting of the blockade would hurt Armenian producers who could not compete with subsidized and protected Turkish products
During June 2009 in Yerevan the ARF Bureau published an excellent report on the impact of the opening of the Turkish border on different economic sectors in Armenia. The report provides detailed information about both Turkish and Armenian economic sectors. 
The information of this section, is based on the information available in this report.
We could divide Armenian producers into two groups: First, large companies producing energy and raw materials such as copper. Most of Armenia’s exports are based on raw materials. This group will be affected very little from the opening of the Turkish border. The second group could be represented as small and medium size producers, producing for the domestic markets, mainly in the agricultural and food production sector. It is expected that the cheap Turkish imports would hurt this second group of Armenian producers and some of them would go bankrupt. A major advantage of Turkish producers is the amount of government support that they receive. It is safe to say that the Turkish government supports its domestic producers more than Armenia’s government supports producers in Armenia in three different ways: protecting domestic production, subsidizing domestic production and promoting exports.
Protecting domestic production: Turkey protects domestic production from imports through higher tariffs and quotas than Armenia. In Armenia, many goods don’t have import tariffs and the highest tariff is 10 percent, while in Turkey the average tariff is 10 percent and about 1/5 of the goods have tariffs higher than 10 percent. A major sector that is protected is the agricultural sector. Relative to Turkey, Armenia has significantly fewer import restrictions. When Turkey lifts the blockade this inconsistency must be addressed.
Government subsidies: In Turkey there are many state programs and agencies that provide state support and subsidies to local producers. Farmers are supported through law interest loans, and other subsidies, such as funds to buy fuel and fertilizer. When market prices of certain agricultural goods, such as olive oil, cotton, wheat etc. go down significantly, the government subsidizes their producers. Turkey reduces the tariffs and restrictions on imported goods that are used as inputs to produce goods in Turkey. These measures act as subsidies to the local producers. Also, Turkey spends relatively much more on research and development than Armenia, which could give it an advantage in the long run. Armenia’s government can’t afford to provide so many subsidies to its producers; therefore when Turkey lifts the blockade Armenian production will be vulnerable to Turkish imports.
Promoting exports: A Turkish government agency called Trade Promotion Center is the main organization through which the state promotes exports. This center achieves its goal through promoting research and development, providing and publishing information about trade, managing plans for exports and promoting trade through intergovernmental relations. The government also promotes exports through reduction in taxes and subsidies. Sixteen product groups, such as eggs, honey, processed fish, etc., receive export subsidies from 10 percent to 20 percent of their total value.
The Turkish government promotes exports through subsidized loans. In 1987 The Turkish government created a special bank called Eksimbank, to finance and support businesses that export goods. Its goals are to increase the volume of Turkish exports, to find new international markets for Turkish exports, to diversify the Turkish export goods and to support the businesses that cooperate with Turkish exporters, their investors or foreign partners. This bank provides loans with low interest rates to these entities.
It is amazing that the government of Armenia still advocates unrestricted markets and justifies the signing of the protocols by arguing that the protocols are promoting free markets, given the fact that the Turkish government does not just rely on free markets and is actively involved in the economy,
3. The lifting of the blockade will cause a modest increase in Turkish imports
transportation cost will go down, when Turkey ends the blockade and Turkish imports start arriving to Armenia directly instead of through Georgia. This will increase the amount of Turkish products that would be competitive in Armenia. In 2007 Beilock and Torosyan estimated that the lifting of the blockade would increase imports from Turkey by about 50 percent. 
During 2008, according to the National Statistical Services of the RA, armstat.am, imports originating from Turkey represented just 6.1 percent of Armenia’s total imports. Therefore a 50 percent increase of a small percentage of Armenia’s imports should not have a major impact on the standard of living of the population and poverty, contrary to the c
laims of the supporters of the Protocols. It is interesting to note that Armenia has open borders with Iran and Georgia; however the level of imports from these two neighbors is very modest. The imports from Iran represent 4.6 percent of total imports, while imports from Georgia represent just 1.1 percent of total imports. This implies that open borders do not necessarily generate high levels of trade.
If the powerful rich Armenian oligarchic importers artificially keep the prices of Turkish products high, then the gains of the cheap Turkish imports would go to the rich Armenian oligarchs, instead of the Armenian consumers. In this case the Armenian consumers would gain very little from the lifting of the blockade, while the Armenian producers would lose significantly, generating a net overall economic loss.
4. For the reduction of poverty in Armenia, the improvement of the domestic economic and social environments is much more important than the lifting of the blockade
If the government and the leadership of Armenia are really concerned with the reduction of poverty in Armenia, then instead of wasting energy on lifting the Turkish blockade, which will have debatable economic impact on the standard of living, they should use their resources to implement domestic reforms, such as:
1. Reduce the power of rich oligarchic monopolists and promote genuine competition in Armenia. We could argue that the increase in the level of competition in the Armenian markets is much more important for the development of the economy, than the lifting of the Turkish blockade.3
2. Reduce the level of corruption, bureaucratic obstacles and shadow economy. Improve the legal system. These measures will make it possible for Armenian small and medium size businesses to thrive and contribute to the generation of jobs in Armenia. This will also increase the tax revenues of the government, which are relatively very low compared even to the other former Soviet republics. With higher tax revenues, the government will be able and should: 
- Build public infrastructure in agriculture such as: roads and water resources. Armenia should increase productivity and competitiveness of the agricultural sector. We should reduce the sector’s dependence on the climate, improve irrigation, provide financing to the farmers, improve marketing etc.
- Improve the productivity of the Armenian economy in general. This could be achieved by increasing expenditures in education, research and development, health care and the infrastructure of the country, such as transportation, electricity, irrigation, communication, internet access, etc.,
- Improve pensions, housing and safety nets for the poor.
All these measures would generate economic development and reduce poverty. They would increase the standard of living of the people and not just the living conditions of the upper middle class and the rich. 
In conclusion, dubious economic results do not provide justification for signing the Turkey-Armenia protocols, which will confirm and accept that Kars, Ardahan, Massis, Ararat and the remaining Armenian lands occupied by Turkey are Turkish land, which will generate directly or indirectly doubts about the Armenian Genocide and which could endanger Karabakh.
1. Download the ARF Bureau economic report HERE.
3. During December 2009, The Civilitas Foundation in Armenia conducted a poll through its web site and 88% of the respondent “think that domestic reforms will have a better influence on the economy” than the lifting of the blockade. See the poll results.
4. Read a very good article by Serouj Aprahamian and Allen Yekikian, “In Who’s Interests? The Political Economy of Armenia-Turkish Relations,” Asbarez, December 28, 2009. This is an excellent investigative reporting and analysis of the economic interests of the ruling class in Armenia.