Dreaming of South Caucasian Economic Space?
05 September, 2013
Dreaming of South Caucasian Economic Space?
During the last meeting of Georgian Vice-Premier and Economic Minister Girogi Kvirikashvili with Armenian PM Tigran Sarkisyan in Yerevan on August 30, 2013, the latter suggested the creation of a unified economic space to strengthen economic ties between the two countries.
“We should create a unified territory, where our nations will be able to cooperate in different fields that will lay ground to stronger economic ties”, Sarkisyan declared. Georgian Vice-PM stressed the importance of mutual Georgian-Armenian
investment project and cooperation in different economic fields such as transportation, agriculture, tourism and customs. He also underscored the necessity of restoration of air traffic facilities between Tbilisi and Yerevan. The implementation of mutual investment projects and partnership between economies were also acclaimed by Georgian economic analysts; however, the idea of forming a common territory split opinions. Demur Giorkhelidze, an economic analyst, welcomes the initiation of common economic space, as he finds it to be a step forward to gradually create common South Caucasus economic space, which will serve as a indomitable attraction for foreign investors, who are more interested in substantial markets than any of three countries of the region [Georgia, Armenia and Azerbaijan] representing pretty small markets if taken separately. The “frozen territorial conflict” between Armenia and Azerbaijan does not seem to be an insuperable barrier to him due to the fact that he believes and history also suggests that economic interests may eventually get political rivals closer to each other.
“It is high time to remove customs and trade barriers among the three South Caucasian countries,”Giorkhelidze said in an interview to Georgian Journal. “The political elite of Armenia and Azerbaijan seem unprepared to take this step for the present moment but subsequently they will definitely get ready for it. As an added bonus to the fact, that the three South Caucasus countries have peacefully co-existed through many centuries, they have also managed to understand each other extremely well and realize the importance of their links. Based on my personal experience, while attending regional meetings held outside Armenia and Azerbaijan, the representatives of both countries unanimously agreed that economic integration is of crucial importance for our region. Let’s take Germany and France as an example; as history shows, they were political rivals but later became allies within the EU space. If, in this regard, nothing changes for better we will definitely have no future.”
Ditrich Muller, co-founder of Georgian Investment Group, shares the idea of common South Caucasus economic space but questions the relevance of forming a common Georgian-Armenian territory, which may have hidden bombs. According to him, thanks to liberal reforms carried out by the former government, which made a strenuous effort to reduce corruption, abolish red tape and cut down taxes, Georgia has already created a better business environment than Armenia, where corruption is still so commonplace that it hinders entrepreneurship from being developed. Muller also doubts that the initiative may affront Azerbaijan, an important and trusted partner of Georgia in international transit projects and rated as one of the top three trade partners of Georgia, while both investment and trade turnover with Armenia are pretty low.
“I cannot comprehend how the idea of the suggested common territory can strengthen economic ties with Armenia. We should base our approach on economic or political benefits, whereas this initiation offers nothing to us. It may only upset Azerbaijan, the interests of which we should take into account under any circumstances. The united Caucasian economic space, like EU, sounds good as it involves the entire countries, including Azerbaijan; however, in order to cultivate friendly relations with Armenia, the isolation of certain parts, like common free economic zones, seems completely redundant. Armenian businessmen are already very active in Georgia because of the fact that the business environment is far better here. Who obstructs people to run business throughout the entire Georgian or Armenian territory? And what kind of game are we supposed to play on that common territory - Georgian liberal approach or Armenian unreformed system? these issues are really worth thinking about,” - Muller says.
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