Armenia to have cheaper transport for trade

A news report from ArmeniaLiberty states that a key railway link between Georgia and Russia may be restored in only two years time, which means that goods coming from Europe and Russia through Tbilisi by train will cost a lot less. Over $200 million will be dedicated to the reconstruction project, which will mainly be concentrated in Abkhazia, a region in Georgia that was plagued by war in an effort to attain autonomy, which it effectively did. As a result the railway there was destroyed. The article states that:

The absence of railway communication with the outside world is widely seen as the main reason for the disproportionately high cost of transporting goods to and from Armenia. Economists say that in turn is a major obstacle to a more rapid growth of the Armenian economy.

Thus trade with the outside world will increase even more, resulting in lower costs for consumers here and a viable outlet for export of goods already manufactured now and potentially manufactured later on, assuming foreign countries decide to start opening more factories in Armenia, something that is still up in the air.

In Vanadzor goods are already moving back and forth from and to Georgia--a large sized trade depot that was built as far back as before the turn of the 20th century exists there. Obviously it was expanded during the Soviet era, but the railway itself needs dire repair. Apparently it takes about 12 hours to make the trip from Yerevan to Tbilisi, which took at most five hours during the good old days. The trade going on now is not nearly a fraction of what it once was, but there is activity there, and it will increase substantially soon enough. Vanadzor's economy especially will also be significantly strengthened one would guess.

This may not be something that people may want to hear, but restoring a key railway link to the north is an excellent, albeit short-term alternative to having the Turkish border opened, assuming Turkey will ever agree to end its blockade against Armenia. Hopefully some of the oligarchs controlling Armenia's economy will chip in to renovate the internal railway, at least to the Georgian border. Let's see what happens in the next few years. But the announcement sounds very promising.

Read the full article here.

Photo courtesy of Photolur