Ex- finance minister points out risks for Armenian economy from opening of regional communications

YEREVAN, November 10. /ARKA/. Classical economic theory indicates that trade integration or trade with neighbors has a positive impact on the well-being of the population, ex-finance minister of Armenia Vardan Aramyan said in the Special Opinion program on the YouTube channel of Novosti-Armenia news agency.

However, he pointed out that trade integration has two components - consumer and producer welfare.

"If your economic capacity and productivity is weaker, your general welfare increases at the expense of consumers who are supplied with cheaper products. For example, I will buy tomatoes not for 400 drams, but for 200 drams. As a consumer, I will be satisfied, my welfare will increase, but in return my country will lose economic potential, because tomato producers will have to close down their business," he said.

With this in mind, Aramyan said, the question is what kind of policy should be chosen. 'Considering the fact that a neighbor country or counttries are openly hostile with absorption plans it is necessary to pursue a reasonable policy. This means protecting your producers and supporting them with appropriate instruments so that they "do not suffocate".

'Otherwise, as life shows, strong and powerful economies absorb small economies," the ex-minister noted.

Addressing the Silk Road international conference in late October in Tbilisi, Georgia Armenian PM Nikol Pashinyan unveiled the 'Crossroads of Peace' project, saying the South Caucasus region needs a stable peace, which is difficult to achieve without open roads.

"Open borders, economic, political, cultural ties are impossible without open roads. For this reason, our government has created and presents the ‘Crossroads of Pace’ project as an important part of the peace agenda," he said. -0-