If Armenia didn't join Eurasian Economic Union, it would lose $3 to 4 million within five years and face economic collapse - economist

YEREVAN, December 1. /ARKA/. If Armenia didn't join the Eurasian Economic Union, it would lose $3 to 4 million within five years and face economic collapse, Professor Ashot Tavadyan, head of the mathematical modeling department of Armenian State University of Economics, was quoted by Novosti-Armenia as saying Saturday at a news conference. «A 30-percent discount on natural gas came as first advantage of Armenia's accession to the union,» he said. «This gives about $150 million a year and about $1 billion for five years,» He also expects that a duty-free import of rough diamonds from Russia may spur development of diamond-cutting industry, which has 6.5-percent yield. «We have also received a $270-million loan at a three-percent interest rate with repayment starting in 2019 for reconstruction of the Armenian Nuclear Power Plant,» Tavadyan said. As for increase in prices, the expert said it can be prevented by downing VAT from 20% to 18%. «We have received all this since, in fact, we are integrated in the Eurasian Economic Union, and after Armenia expressed intention to join the union everything continued at de-jure level,» he said. Among possible disadvantages, the expert singled out reduction in exports from Armenia to Russia because of introduction of customs duties, reduction in volumes of money transfers, a sharp increase in gas prices and some threat to economic security. Probable associated membership in the European Union, he said, even in European specialists' opinion, would bring $146 million to Armenia in the future, but only if the Armenian-Turkish border was open. Tavadyan said that close integration with Russia and confirmation of this integration «will give additional advantages, such as participation in tenders for state procurement in Russia, which will propel our light industry and agriculture». He also said that a $2-billion investment was discussed between the Russian and Armenian presidents in 2013. «Though the matter was postponed because of economic sanctions against Russia and a sharp dive in oil prices, I think this deal will be done, since it is very important for integration processes,» he said. --0----