The sanctions imposed by the EU against Russia have led to significant changes in the world economy. Many countries, especially Western states, are trying to exert economic pressure on Russia by adhering to these sanctions. Against this backdrop, the role of trade relations with Central Asian and South Caucasian countries in the Russian economy is increasing. In this context, trade turnover with Armenia draws special attention.
In this article, Report touches on the increase in trade between Armenia and Russia, its causes, and Armenia's continued disregard for sanctions imposed by European countries. There is a significant increase in Armenia's trade turnover with Russia. This increase in trade turnover has been observed since the EU imposed sanctions against Russia in 2022. Interestingly, at the root of this increase is Armenia's sale of products it receives from the European Union to Russia. This is tantamount to effectively ignoring Europe's sanctions. As evidence of all this, one can pay attention to the social media posts of Robin Brooks, a leading expert at the Brookings Institution.
The graphs in those posts also reflect a sharp increase in trade turnover between Armenia and EU countries.
According to official statistics released by Armenia, trade turnover between Armenia and Russia reached $9 billion in January-July 2024, which is 2.4 times more than in the same period last year. This shows that Armenia has chosen not to comply with sanctions by sending products it receives from the EU to Russia. This fact casts a shadow on the effectiveness of the European Union's economic pressure.
The graph below showing Armenia's overall and foreign trade relations with Russia is also proof of this.
The graph shows a decrease in exports between Armenia and Russia, which is another way to avoid attention. While Armenia has reduced exports to Russia, it has sharply increased them with other countries. Considering Armenia's production potential, one can see that these exported products are those purchased from Europe and sent to Russia through third countries.
However, despite all this, Armenia also carries out direct export operations. Robin Brooks describes this process directly as a trade mechanism set up by Armenia to reduce the impact of sanctions and gain economic benefits.
Russian Deputy Prime Minister Alexey Overchuk also said at a meeting of co-chairs of the intergovernmental commission on economic cooperation between Russia and Armenia that trade turnover between the two countries will range between $14-16 billion in 2024. This figure shows that Armenia is disregarding sanctions and continuing re-export operations with Russia. As a result, trade turnover between Armenia and Russia is expected to increase six-fold from $2.6 billion until 2022 to this year's expectations. In addition, export operations increased from $841 million to $3.4 billion in 2023.
Armenia is now delivering these goods to Russia through more indirect routes rather than directly. One such route is the United Arab Emirates. As a result, in the seven months of 2024, exports between Armenia and Russia decreased by 22.4% to $1.6 billion. However, during this period, Armenia exported $3.95 billion worth of goods to the United Arab Emirates, which is 7.7 times more than in the same period of the previous year. Last year, Armenia's exports to this country increased by 4.2 times, and in 2022 by 7.2 times.
Thus, since the start of the Ukraine-Russia war, Armenia's exports to the UAE have increased 53 times. Overchuk evaluates Armenia's behavior as a strategic and economic alliance and emphasizes that relations between the two countries will deepen further.
In conclusion, it is safe to note that by playing such a transit role, Armenia is trying to strengthen the country's economic position. Although this shows itself as an increase in statistical figures, it is leading the economy of a country with very weak production to the brink. Such sharp dependence on geopolitical situations is a threat to the economy of any country, and Armenia has chosen this path.