Domestic Economy

Connectivity Projects With Armenia Take Center Stage

Connectivity Projects With Armenia Take Center Stage Connectivity Projects With Armenia Take Center Stage

Armenia’s land borders with Iran makes it a gateway to Eurasian and European markets for Iranian goods and gives Iranian producers the opportunity to complete part of the production chain in Armenia and distribute their goods throughout the Eurasian Economic Union.

First Vice President Es’haq Jahangiri, who arrived in Armenia on Wednesday for a two-day visit, made the statement in a business forum in Yerevan on Thursday.

The EEU is an economic union of former Soviet republics led by Russia to guarantee free transit of goods, services, capital and workers among member states. Besides Russia, other members include Armenia, Belarus, Kazakhstan and Kyrgyzstan, IRNA reported.

The Iranian VP said Iran needs to play a more significant role as one of the transit routes for Armenian goods.

“The importance of Armenia's North-South Road Corridor and Armenia-Iran Railroad projects goes beyond bilateral relations, as they have regional significance. That is why I am here to announce Iran’s full support for these two projects,” he said.

The North-South Road Corridor is a major infrastructure project aimed at connecting Armenia's southern border with its northern point by means of a 556-km-long Meghri-Yerevan-Bavra Highway.

The Armenia-Iran Railroad is also an ongoing project that seeks to connect the two countries through Armenia’s mountainous Syunik Province bordering Iran, thereby creating the shortest transit corridor from the ports of the Black Sea to the ports of Persian Gulf.

“Problems associated with a third power transmission line from Iran to Armenia have been resolved and the implementation of the project has resumed. The project will be completed within 24 months and shore up economic ties between the two neighboring countries,” he said.

Two 220-kilowatt transmission lines currently run from Iran to Armenia and the Export Development Bank of Iran is set to allocate $93 million for the development of a third cross-border transmission.

"Tapping into the potential of the two countries' free trade zones, particularly Aras Free Economic Zone, which has shared borders with Armenia, would open up vast opportunities for Armenian traders and investors," the vice president said.

Aras is located in northwestern Iran and borders Armenia, Azerbaijan and Nakhchivan Autonomous Republic. It serves as a corridor and connects Iran to Central Asian countries.

Jahangiri also underlined the importance of removing obstacles to trade between the private sectors of the two countries and said the end-price of exporting goods to either country needs to decline.

“To reach this goal, the two sides are weighing a preferential trade tariff agreement, the draft of which has been handed to Armenian officials,” he said, adding that a joint committee needs to be formed to finalize the task.

Jahangiri noted that while the two countries enjoy good political ties, the same cannot be said about trade and economic relations.

Iran’s non-oil exports to Armenia stood at a meager $100 million last Iranian year (ended 20 March). Bitumen, aluminum nitrate, steel products, sodium sulfide, solvents, tiles, ceramics, onions, shallots, kiwi fruit, cucumbers and chicken were among the main goods exported to Armenia.

Imports of commodities like air pumps, battery waste, aluminum alloys, animal vaccine, copper waste and floor covering over the same period stood at around $19 million.

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Armenian Prime Minister Hovik Abrahamyan, who was also present in the Yerevan business forum, said, "Armenian-Iranian relations are based on centuries-old friendship and mutual respect. I am convinced that the new political situation in the region will enable us to strengthen our ties more than ever.”

Abrahamyan said Armenia’s textile and processing industries, transport and tourism are very likely to interest Iranian businesspeople.

"The construction of the North-South Road Corridor, Armenia-Iran Railroad and the third power transmission line between Armenia and Iran as well as the Meghri Hydroelectric Power Plant will give a new push to regional development," the premier was quoted by Armenian news agency as saying.

Meghri Dam, also known as Aras Dam, is a hydroelectric dam currently under construction on Aras River near Armenia's southern town of Meghri on the Armenia–Iran border.

Abrahamyan hailed the Iran's nuclear deal with world powers and stressed that the July 14 accord will benefit the entire region by contributing to regional and international security and sustainable development, opening perspectives for the expansion of bilateral and multilateral cooperation.

He expressed Armenia’s readiness to support cooperation and launch dialogue between Iran and EEU, specifically regarding a free trade agreement.

Also at the forum was CEO of Export Development Bank of Iran, Ali Salehabadi. He said the Armenia-Iran Railroad will boost cooperation between the two countries and that neighboring countries are naturally a priority for Iran in terms of development of relations.

“Iran's presence in the markets of its neighbors is more competitive than in other markets. There are growing possibilities both in the area of goods and engineering and technical services,” he said.

According to Armenian sources, the forum was attended by more than 170 Armenian and 75 Iranian businesspeople.