1000 GMT October 17, 2019
Iran has been able to export goods to the Eurasia nations via Armenia for many years. Armenia, too, has been able to gain access to a vast market in the Middle East via Iran.
Joint ventures and exports to regional countries are among the goals that the two sides have underlined in recent years.
Increasing bilateral trade would mean Iran and Armenia can have more access to global markets. Such relations is of importance for Iran, especially now that the country is under sanctions and is exploring ways to replace oil revenues.
To get the latest developments in Iran-Armenia trade conditions, Iran Daily conducted an interview with the head of Iran-Armenia Chamber of Commerce Hervik Yarijanian.
The following is an excerpt of the interview.
IRAN DAILY: When it comes to Iran-Armenia economic relations, the first thing that is discussed is the Eurasia market. Why is it so?
HERVIK YARIJANIAN: Iran can easily dominate the Eurasia market economically and this can be done via Armenia. Currently, the price of many goods exported to the Eurasia market is twice that of Iranian counterparts. Iran can supply these goods at half of the price, even half of the price of their Chinese counterparts. But we see that the countries in the Eurasia market purchase their goods at a higher price from other countries. And this is because they have trade agreements with them, but have no such agreements with Iran.
Moreover, we can have more cooperation with China, turning Iran into a bridge connecting China and Commonwealth of Independent States (CIS) nations. We can ask Chinese companies to produce their goods in Iranian industrial towns at lower costs in terms of labor and energy. Chinese companies can then send the goods manufactured in Iran to CIS nations. I think this proposal will be accepted by China as it will give it an edge in terms of logistics and competition.
Why has this trade link not been established yet?
This is partly because we have restricted the imports of certain goods to our country. Foreign traders like to be able to import goods if they are to export certain products. A while ago, the price of a standard plastic chair exported to Hungary was €2 — so cheap that it was surprising for them. Given the increase in value of foreign currencies in Iran, we are now able to export the same chair at half of that price and our producers even welcome this.
As I am a member of Plastic Machineries Manufacturer Association, I know that the plastic needed for machineries manufacturers is currently exported from Bangladesh to Spain while and we have no exports in this respect. This is while the quality of our plastic complies with international levels. The reason why they can export their products to Europe is that they have acquired the necessary permits. Our private sector can acquire these permits as well.
Can you explain the level of Iran-Armenia trade, especially after the second round of US sanctions were reimposed on Iran?
Currently, banking affairs is the main cause of concern for traders. The restrictions (after sanctions) has made it more difficult to order registration, creating headaches for traders.
Bilateral trade in recent years has been around $300 million, most of which goes to energy.
How can we help our traders under sanctions?
The best solution is that we create a credit institution jointly with CIS nations so that they can act as a liaison between our traders with regional countries and facilitate financial transactions. An institution like China's Bank of Kunlun that has been very instrumental for us.
For instance, Iran exports gas to Armenia and import electricity instead. The remainder of this transaction can be deposited into a fund. A financial institution can also take and give the money for such transactions, acting like a local SWIFT.
How can the Iran-Armenia Chamber of Commerce facilitate bilateral trade and exchanges with CIS countries?
An Iranian delegation consisting of 120 traders will travel to Armenia in May to explore ways to increase bilateral trade as well as those with the CIS countries. This delegation is the largest one to visit Armenia in the past year and we hope the trip would lead to joint venture projects in different industrial sectors.