Giving up the Russian market is very presumptuous: Alexey Bobrovsky

Alexey Bobrovsky, Director of the Institute for the Study of World Markets, spoke with Alpha News about the risks of Armenia’s reorientation toward the European market and its rejection of cooperation with Russia.

According to the expert, Armenian authorities do not fully grasp the seriousness of the situation, since choosing a foreign economic course requires taking into account the factor of economic geography, working with large sales markets.

“I think politicians in Armenia, at least those who make decisions, don’t fully understand the seriousness of the situation. It’s surprising that people forget about a science like economic geography. You can search for points of political contact for a long time. But if a country is located in a region where there are important, large sales markets, neighboring partners, it’s strange to look for new partners in other regions and corners of the globe, without taking into account logistics, costs, or simply put, how you’re going to deliver your products there and enter those markets,” Bobrovsky said.

In the expert’s view, entering European markets requires serious preparation, since Armenian producers have not previously focused on the necessary standards, and abandoning the Russian market could lead to major losses.

“Today, in the modern world, there are quite a lot of restrictions, for example, on product quality, which must meet various standards in order to enter other markets. This is especially difficult if a country’s producers, in this case, Armenia’s, have not previously met those standards and have never prepared to enter, for example, the European market. And in this regard, of course, giving up the large Russian market is very presumptuous,” noted the Director of the Institute for the Study of World Markets.

As the expert noted, it is impossible to combine integration with the European Union with participation in Eurasian structures, and the attempt to replace the Russian market with the European one has no real economic basis.

“If Armenia is ready to move toward the European Union, it will have to choose between the EU and the EAEU. These are different standards, different interstate unions, and so it won’t be possible to be part of both at once. This is where the main question arises: is Armenia, being geographically far from what it considers an attractive sales market, ready to deliver there products that aren’t even wanted? In my view, that’s a utopia. As for products, especially agricultural ones, it’s obvious that these aren’t volumes that would greatly interest Europe, and Europe won’t necessarily admit them to its market readily or easily. And frankly, I don’t understand where a producer in Armenia would then sell these products,” Bobrovsky emphasized.

According to the economist, Georgia’s example shows that losing the Russian market can have long-term consequences, since after returning, products may no longer enjoy the same demand.

“Georgian goods, primarily wine, mineral water, and a number of other products, left Russian retail chains. Not very much time passed, and they returned to the shelves. But the Russian consumer no longer needs them: tastes have changed, the market situation has changed. You left, losing a certain amount, and came back essentially still losing, because the efforts that used to work are no longer enough,” Bobrovsky concluded.