economic performance and prospects : markets and trade

ARMENIA'S ECONOMY OVERVIEW

Markets and trade

Currnecy

The dram (AMD) is freely convertible under a managed float. It may be converted through local banks with no restrictions. Companies may open hard currency accounts in Armenian or foreign banks.

Price liberalization

Almost all prices have been liberalized, with controls remaining only on urban transport, electricity, hot water, gas, heating, sewerage, rubbish collection, state-owned housing, telephones and irrigation.

Trade liberalization

Armenia has a liberal foreign trade regime with a simple two-band import tariff (at 0 per cent and 10 per cent), no taxes on exports and no substantial quantitative trade restrictions. Import, export and domestic production licenses are required only for health, security and environmental reasons. There are no limits on hard currency imports. Tariff exemptions are extended to all goods originating from Russia, Turkmenistan, Moldova, Tajikistan, Kyrgyzstan, Georgia and Ukraine under the terms of free trade agreements. Excise taxes are charged at various rates on the import or production of some goods (including alcohol, tobacco, petrol).

Free economic zones

No foreign trade zones or free ports exist at present. The government and local business community are exploring the possibility of establishing several industrial parks that would involve Zvartnots international airport and some large electronics firms, and that might enjoy free trade zone status in the future.

International cooperation

Armenia applied to join the WTO in early 1995. Since then, it has advanced rapidly in trade liberalization and accession to the WTO was originally planned to take place at the Seattle summit in late 1999. It is now expected to happen later in 2000. The new customs code has been approved by the Parliament in July, which, once effective since January 1, 2001, will further streamline customs procedures and bring them into compliance with WTO regulations. WTO accession will be important for increasing opportunities for trade and investment.
The Partnership and Co-operation Agreement between the European Union and the South Caucasus countries, which include Armenia, Georgia and Azerbaijan, came into effect in July 1999. The Agreement aims to improve economic cooperation and trade within the region and with the European Union. Armenia has a free trade regime with Russia, Ukraine, Turkmenistan, Georgia, Moldova, Tajikistan and Kyrgyzstan, and a Most Favoured Nation trade regime with the EU, USA, Switzerland, Romania, Bulgaria, Canada, Poland, Hungary and eight others.

Foreign trade

Foreign trade turnover totaled about US$ 1042.9 million in 1999, with US$ 231.7 million (FOB) of exports and US$ 811.2 million (CIF) of imports. Trade deficit totaled US$ 579.6 million. Exports grew by 5.1 per cent compared with 1998, and imports decreased by 10. 1 per cent, leading to a 15.0 per cent reduction in the trade deficit. Trade with the CIS countries accounted for 23.3 per cent of the total. Processed and raw diamonds accounted for 43.1 per cent of exports (mainly to Belgium), 16.4 per cent were minerals, and 10.8 per cent non-precious metals. Other main export items include machinery, transport equipment and foods. The main imports are food, ftiel, non-food raw materials, machinery and chemicals.

Main export and import countries

Source: National Statistics Service

Main export and import items

Source: National Statistics Service