A question for all Armenians.

[Ashot]

LK jan, welcome back to the forum!!! Hope this time you will feel much more welcomed then the previous time!!!

 

How are you Levon jan, inch ka chka? ches zangnvum, lav yes qez kzangem erkushapti!!! menak te hamart mihatel PM ara, korela motits@s!!!

[LK82]

Thanks for the warm welcome. As you can see I'm the same and feel comfortable as before.

 

I'm good Ashot jan, How are you? Actually I've misplaced your number, sure i'll pm you, talk to you soon.

[Ashot]

Levon jan, yeselem shat lav axper jan, de spasumem qo namakin!!

[Aratta-Kingdom]

Levon jan, welcome back aper.

[LK82]

Thanks Aratta jan. Happy to be back. How have you been, good I hope.

 

BTW nice avatar.

 

Have you seen the comedy clips of Bush on Youtube?

[Aratta-Kingdom]

which one are you talking about aper? link@ ktas?

[LK82]

This video is just one of them.

 

[Aratta-Kingdom]

lol lavn er

[Ashot]

vochte lavner - ayl yevs mihat var apatsuytser te inchqan ankirt yev andastsirak ghekavar uni ays anter mnatsats yerkir@...

[Aratta-Kingdom]

et menq gitenq aper, bayc esor xi es tenc jgaynacats? normal a amen inch?

[Ashot]

Ed jan, do ho vratsi ches??? lol

 

Gites che asuma vratsu tghen namaka ugharkum tun, mer@ tuna galis tenuma her@ kataghats nstatsa... asuma incha eghel, asuma es mer lakot@ namaka ugharkel mech@ grela PAPA VISHLI MENYA DZENGI poxaren miqich meghm grer, Papa vishli menya dzengi...

 

Hima qona... Im greluts vonts imatsar vor jghaynatsatsem???

Edited April 30, 2008 by Ashot

[Aratta-Kingdom]

lol vor asem gisher@ yeraz em tesel khavatas?

 

du en asa, inch a ege? petq a xarnvenq?

 

 

u qani chem morace- yerazi mej el qezanic prtsum chka.

Edited April 30, 2008 by Aratta-Kingdom

[Ashot]

Inch erazes tesel Ed jan... asa tesnem - normala amen inch aper!!!

[Aratta-Kingdom]

yerazi mas@ katak er-indz mot amen inch normal a.

 

qo mot inch ka? lav a amen inch?

[Ashot]

Tsentr aper - hoyakap!!!

[Aaron]

Quote

"

"Nous n’avons pas besoin d’eux, ils ont besoin de nous. La Turquie veut de bons liens économiques avec ses voisins. S’ils voient ce fait et prennent des mesures en notre direction, nous prendrons des mesures en leur direction" a dit le ministre d’Etat.

(GIF)

 

« Nous n’avons aucun dialogue commercial ou politique avec les arméniens à cause des problèmes qu’ils ont crées. L’ouverture de la frontière n’est pas malheureusement possible pour l’instant sans que l’Arménie résolve ses problèmes avec l’Azerbaïdjan et change sa position envers la Turquie » a précisé Mehmet SimSek

"

 

This is in french and basically sums what I wrote at the beginning of this thread, that even if Armenians are willing to put aside many things and beg for the border to open, the Turks don't really want to. The balance of forces is too much in their favor. They don't need us, we need them! Use google translation if needed.

 

I am for opening the border, and even forgetting SOME issues dividing us, finding a negotiated and moderate solution for our problems ... but it's not gonna happen. If I was Turkish, I wouldn't open the border, since the present day policy does actually have realistic chances of weakening Armenia into submission.

 

"Why change it? What's pressing? nothing right? To sum it up in full honesty: as the most powerful country in the region (Turkey), I do whatever I want!"

 

A.

 

[Twilight Bark]

They don't need us, we need them!

Not necessarily. The closed border is a great blessing in disguise. Unfortunately the window of opportunity it provided has not been used in the wisest and most efficient way. If it is to have an independent future, Armenia has to avoid being dependent on Turkey for any significant economic activity. Think Georgia instead.

 

I am for opening the border, and even forgetting SOME issues dividing us, finding a negotiated and moderate solution for our problems ...

There is only one problem, and there is no need to negotiate. Turkey will remain unreformed in its self-image, its view of history, what it views as "virtue" and "vice", and its cultural values in the forseeable future. Given the decline in Armenian cultural strength, "kitch"ization of the society, and the considerable strength of the Turkish pop culture machine, even "opening the border" for purely cultural "exchange" (likely one way) is quite dangerous. While the saying "what doesn't kill you makes you stronger" is used in the context of competition, I think in this case it actually would kill us. I am not against open borders per se. I am against opening borders unprepared, especially when we have the better alternative of Georgia.

 

but it's not gonna happen. If I was Turkish, I wouldn't open the border, since the present day policy does actually have realistic chances of weakening Armenia into submission.

Actually, I would. Armenia would become irrelevant in 10-15 years following the opening of the borders, and worse in the longer term.

 

If we don't recognize our weaknesses and be weary of the many strengths of our adversaries, and act accordingly, we are doomed to end up in the evolutionary dustbin.

Edited May 30, 2008 by Twilight Bark

[garmag]

.......

Actually, I would. Armenia would become irrelevant in 10-15 years following the opening of the borders, and worse in the longer term.

 

If we don't recognize our weaknesses and be weary of the many strengths of our adversaries, and act accordingly, we are doomed to end up in the evolutionary dustbin.

 

Why this fear of being overwhelmed or assimilated by Turkey is prevailing in your thoughts?

Turks did not manage to do so during their dominion of Armenians over 5 centuries! They chose to exterminate Armenians in a Genocidal act! since they could not compete in the market place!

 

Could it be Turks fear Armenians might, once again, become pre-eminent businessmen and dominate the economy as they had done during the Ottoman empire?

 

Their efforts, by blockading Armenia, have not achieved their aim of suffocating Armenia so far

 

Opening borders with Turkey... without her recognition and reparations for 1915 Armenian Genocide... should never be considered a plus for Armenians at large.

 

 

 

[Boghos]

Why this fear of being overwhelmed or assimilated by Turkey is prevailing in your thoughts?

Turks did not manage to do so during their dominion of Armenians over 5 centuries! They chose to exterminate Armenians in a Genocidal act! since they could not compete in the market place!

 

Could it be Turks fear Armenians might, once again, become pre-eminent businessmen and dominate the economy as they had done during the Ottoman empire?

 

Their efforts, by blockading Armenia, have not achieved their aim of suffocating Armenia so far

 

Opening borders with Turkey... without her recognition and reparations for 1915 Armenian Genocide... should never be considered a plus for Armenians at large.

 

I don't see why we should fear opening the borders. The Turkish cultural invasion, if we can call it that, has already happened. Already in Soviet times people watched Turkish TV.The physical border has little to do with it.

From an economic standpoint it would bring cheaper goods to Armenia. Turkish goods make it to Armenia through Georgia and both transportation and "taxes" make them more expensive than necessary.

I understand TB's worries but I think Armenia could live with an open border with Turkey. It would help getting rid of ghosts.

[Twilight Bark]

The Turkish cultural invasion, if we can call it that, has already happened. Already in Soviet times people watched Turkish TV. The physical border has little to do with it.

True. And that's where my "anectodal evidence" comes from. However, it's a matter of degree. "Opening borders" presumably means more than the passage of inanimate objects.

 

From an economic standpoint it would bring cheaper goods to Armenia.

And I don't think "cheaper goods" is a good thing for the economy at the moment. If we take that line of thinking to its logical conclusion, we find the "free" stuff sent as "aid" to distressed African countries. The American "food aid" to countries in distress has been detrimental to the local production capacity and long-term self-sufficiency. Why? Because they insisted on sending the American-produced stuff itself, rather than the money to buy it first from the local market. The result was a further collapse of food production in those areas, perpetuating a vicious circle of dependency and poverty. "Cheap goods" is a version of that. The Swiss pay ridiculous prices for their daily shopping, and yet have a wonderful economy. I am not saying that Armenia should isolate itself. But it should not fall for the fallacy of Washington_Consensus either.

 

Turkish goods make it to Armenia through Georgia and both transportation and "taxes" make them more expensive than necessary.

A wise government would have taken advantage of that to encourage the right local industries, and protect them forever if necessary if the difference in prices are small. And if absolute cheapest price is something we must have, the rest of the world consumes east asian stuff transported halfway around the globe, and gets the cheapest prices. Surely Armenia could do fine without being dependent of Turkish goods. Turkish border is not the only border we have. The economic problem has never been due to the closed Turkish border. It's the boneheadedness of people in charge in Armenia.

 

I understand TB's worries but I think Armenia could live with an open border with Turkey. It would help getting rid of ghosts.

There is more than one way to get rid of ghosts. Becoming a dependency of Turkey is one way. It reminds me of petty bourgeois Armenian mothers in Istanbul who quickly become "enlightened" ,"humanitarian", and "cosmopolitan" when their daughter decides to sleep around and marry a Turkish guy. It's easier that way. You don't have to work on cultural preservation and identity (who has the time when you have to keep up with the Hovanesses), which does require a lot of energy, and you get to look real modern and tolerant to boot. Good deal.

 

I know I must be sounding like a dinosaur. It is against my nature to object to open exchange and communication. I have come to my conclusions unwillingly and painfully. And I do hope I am wrong in my gloominess about Armenian competitiveness both in Armenia and the diaspora.

Edited May 30, 2008 by Twilight Bark

[Boghos]

Dear TB,

 

I could venture on the reasons why you believe that Armenia and Turkey should not have open borders seemingly forever. But I will not, because I am sure this will direct us towards other potentially less pleasant themes.

 

I won´t also try to argue with you on the economics front. I could easily come up with the arguments that justifiy open borders, and also bear in mind that open borders do not mean indiscriminae access to each other´s countries.

 

Unfortunately we both share the same gloomy and pessimistic view of certain things. However I am an optimistic pessimist. It is also a result of my family being in Brazil since the 1920s, I suspect. I a living proof that Armenians can survive in the least hospitable conditions. Why couldn´t Armenia survive the Turks?

[Twilight Bark]

I could venture on the reasons why you believe that Armenia and Turkey should not have open borders seemingly forever.

No, I didn't imply that they should be closed forever. The degree of opening should reflect the assessed competitiveness of Amenian economy and culture. Favoring "forever" means expecting or wishing that Armenian culture and economy will remain anaemic forever. That is the opposite of what I think "should" happen.

 

I won´t also try to argue with you on the economics front. I could easily come up with the arguments that justifiy open borders, and also bear in mind that open borders do not mean indiscriminae access to each other´s countries.

Yeah, I know you could. And we would forever be arguing back and forth citing different examples. The devil is in the detail, meaning the specific circumstances.

 

Unfortunately we both share the same gloomy and pessimistic view of certain things. However I am an optimistic pessimist. It is also a result of my family being in Brazil since the 1920s, I suspect. I a living proof that Armenians can survive in the least hospitable conditions.

Being in your line of business, you know the term "survivor bias". That's it.

 

Why couldn´t Armenia survive the Turks?

Because they are not your grandfather's Turks, to paraphrase an old commercial.

[Ashot]

This is a little bit long, but I strongly encourage everyone to read it!!!

 

 

OPENING ARMENIA’S BORDER: SECTORAL AND

DISTRIBUTIONAL CONSEQUENCES

 

Summary and Conclusion

BY ARA KHANJIAN

 

Introduction

 

During early 1990s Turkey unilaterally closed the borders between Turkey and Armenia. It is

expected that when Turkey opens the borders consumers in general and certain economic sectors in

Armenia would benefit, while others would not be able to compete with the Turkish imports and

would suffer. This paper will investigate which manufacturing sectors would gain and which

sectors would lose when a free flow of goods begins between Turkey and Armenia. In order to find

out the sectors that would benefit when the borders are opened, a major part of the paper will focus

on the concept of comparative advantage. The expectation is that Armenian manufacturing sectors

that have comparative advantage would benefit from the access to Turkish markets and expand,

while sectors that do not have comparative advantage could lose.

 

This paper uses four methods to determine the manufacturing sectors in Armenia that would benefit

and the sectors that would lose when Turkey opens the borders. The paper focuses on the

manufacturing sector because empirically it is relatively easier to implement some of the four

methods that are discussed in the paper.

 

Comparative advantage based on Heckscher-Ohlin theorem

 

The first method is based on the Heckscher-Ohlin model, which states that a country would have

comparative advantage and would export labor intensive goods if that country has a relatively large

endowment of labor and would have comparative advantage in capital intensive goods and would

export capital intensive goods if it has a relatively large endowment of capital. This section will

tries to find out whether Armenia has comparative advantage relative to Turkey in the production of

labor intensive industries, high-tech industries, capital intensive industries or agricultural products.

To apply the Hechsher-Ohlin the paper uses Table 1, which provides economic, demographic and

social indicators that could give information about the relative endowment of land, labor, highly

skilled labor and capital of both Turkey and Armenia.

 

These indicators imply that Turkey has comparative advantage in the production of agricultural

goods relative to Armenia. Also these indicators could imply that Armenia has a relatively higher

endowment of highly skilled labor force relative to Turkey; therefore it has comparative advantage

in the production of high tech products relative to Turkey. In the case of labor force, based on

ambiguous data and information, it is difficult to determine which country has a comparative

advantage in the production of labor intensive goods. On the other hand these data could indicate

that capital is relatively more abundant in Turkey than in Armenia.

 

Revealed Comparative Advantage

 

The second method that we will use to determine the manufacturing sectors that would benefit or

suffer when Turkey opens the borders has to do with the widely used method of Revealed

Comparative Advantage (RCA) developed by Bela Balassa (1986). Basically the idea of RCA isthat if a country is able to export significant amount of a product, then it implies that it could

produce that product efficiently and has comparative advantage in its production.

The paper determines few economic sectors where Armenia has high positive RCA, while Turkey

has negative RCA. The RCA numbers of these sectors in Turkey and Armenia imply that Armenia

is able to export successfully these products, while Turkey has to import relatively large amounts of

these products. This could generate opportunity for Armenia to export these products to Turkey,

when Turkey opens the borders. The sectors where Armenia has clear RCA are:

 

Comparative Advantage based on Productivity Ratios, Wage Ratios and Exchange Rates

 

Basically in this method we will compare relative productivity of an economic sector with the

relative wages in Armenia and Turkey. If in an economic sector the ratio of productivity of labor in

Armenia over productivity of labor in Turkey is higher than the ratio of wages in Armenia over

wages in Turkey, then in this sector Armenia would have comparative advantage.

 

In sectors where productivity ratios, are higher than wage ratios, Armenia would have advantage

over Turkey and Armenian producers of these sectors would be able to compete with the Turkish

products. In order to calculate these ratios for each sector we need data for the value of output, the

number of employees and average wages. All these statistics should be consistent for the sectors of

both Armenia and Turkey. At this stage the most recent and consistent set of data that we were able

to generate was from 2000; therefore, the paper generates the productivity and wage ratios for

2000.

 

There are nine sectors in Armenia where the productivity ratios over wage ratios or Final ratios are

greater than 1.2 and where Armenia has comparative advantage. These sectors generate 64 percent

of manufacturing output.

 

This positive outlook would clearly deteriorate, when we adjust the exchange rates.

 

The Effect of Exchange Rates on Trade

 

Besides relative productivity and relative wages, the exchange rate also could affect the ability of a

country to export, Dornbusch, Fischer and Samuelson (1977). First we generated Final ratios by

using productivity, wage, and exchange rate data for 2000. Next in order to investigate the effect of

exchange rates on Final ratios and competitiveness, we use the productivity ratios, and wages of

2000, but we use the exchange rates of October 13, 2006. From 2000 to October 2006 the AMD

appreciated from 540 AMD per US dollar to 383, while the Turkish Lira depreciated from 0.625

Turkish Lira per US dollar to 1.465.

 

The changes of exchange rates of AMD and Turkish Lira on Final ratios are significant. The

appreciation of AMD and the depreciation of Turkish Lira increase the percentage of Armenian

manufacturing production that will have difficulty competing with Turkish product when Turkey

lifts the blockade, from 28 percent to 58 percent.

 

Ranking of Exports-Imports and Intra-Industry Trade

 

The last method is to find out the potential of Armenian exports to Turkey and Turkish exports to Armenia when Turkey opens the borders. First we rank Armenian economic sectors that are currently able to export to other countries from the sector with the largest share of total export to the smallest. Then we rank the goods that Armenia imports, again from the largest to the smallest. We do the same exercise for Turkey. Then we generate two tables. In the first table we include the

top exports of Armenia and the top imports of Turkey. In the second table, we include the top

export sectors of Turkey and the top import sectors of Armenia.

 

If there is an economic sector which represents one of Armenia’s top exporting sectors and one of

Turkey’s top importing sectors, then, when the borders are opened, there would be a high

probability that Armenia would be able to export this product to Turkey. On the other hand, if there

is an economic sector which represents one of Turkey’s top exporting sectors and one of Armenia’s

top importing sectors, then, in this sector Turkey has a high potential of exporting goods to

Armenia.

 

It is interesting to note that out of these ten sectors, seven of them exist also in the list of potential

top ten Armenian exports. This observation might indicate the possibility of intra-industry trade,

when both countries produce the same products and sell them to each other. Intra-industry trade

creates opportunity to Armenian manufacturing sectors that do not have comparative advantage to

produce and export goods to Turkey.

 

In the case of Armenia there could be two sources of intra-industry trade. One possible source of

intra-industry trade is product differentiation. For example, Turkey might have comparative

advantage in the production of cheese, but Armenia might be able to produce certain kinds of

cheese and export it to Turkey. Turkish customers might be willing to purchase the Armenian

cheese because it is different. Another source of intra-industry trade is geographic location. Turkey

might have comparative advantage in the production of furniture relative to Armenia, but because

Armenia is closer to Turkey’s eastern provinces, Armenia might be able to export furniture to the

eastern provinces in Turkey. This could occur if furniture production is concentrated in the Western

Turkey. It might be more expensive to send furniture from Western Turkey to eastern provinces

than buying them from Armenia.

 

Distributional effects of trade liberalization

 

In general it is expected that gains from trade liberalization would be greater than losses. In

international trade theory the assumption is that those who gain from trade liberalization would

compensate those who suffer, and the country would benefit. In the real world the problem is that

those who suffer are seldom compensated, Samuelson (2004.) In industrialized countries when

workers lose their jobs because of trade there is safety net that they could rely on. Trade

Adjustment Assistant programs provide support to the workers who suffer from the trade

liberalization, such as, additional unemployment compensation and opportunities for retraining

program. The Armenian government could transfer some of the gains of certain economic sectors

and consumers to the producers and workers of the sectors that would suffer from the open borders

with Turkey through a Trade Adjustment Assistant program.

 

In economic literature the relationship between trade liberalization and economic growth is

controversial, because trade could have a positive or/and somewhat negative effects on the growth

and development of a country, Edwards, (1993). Famous economists such as Jeffrey Sachs (1987)

question the role of trade liberalization in the performance of the outward oriented economies.

Lance Taylor ( 1991) is even more critical, while Josehp Stiglitz (2005), (2006) argues that tradeliberalization, wouldn’t guarantee higher economic growth and it could cause both poverty and

inequality in a country to increase. He gives the example of Mexico, where one decade after

NAFTA, mean real wages were lower and American agricultural subsidies made some of the

poorest Mexican farmers worse off. Therefore in the case of Mexico free trade caused poverty and

inequality to increase. At the same time in Mexico the growth rate during the decade following

NAFTA was lower than the previous decade of 1980s. The relevant point of this section is that

trade liberalization will not necessarily generate positive results. Adequate infrastructures,

institutions and policies play an important role.

 

Conclusion

 

A challenge that Armenia would face, when Turkey opens the borders, is to find out ways to get

maximum benefit out of trade with Turkey and at the same time to minimize the downside of it. An

important result found in this paper is that when Turkey opens the borders, consumers and certain

Armenian manufacturing sectors would benefit, while other sectors would suffer.

 

The methods used in this paper to determine the economic sectors that would benefit and the

economic sectors that would suffer when Turkey opens the border generated some consistent

results.

 

If we assume that relative productivity and relative wages stayed the same, while the exchange

rates of AMD and/or Turkish Lira changed, then the results adjust significantly. The appreciation of

AMD and the depreciation of Lira were detrimental to Armenian manufacturing sectors and eroded

the competitive edge of many sectors in Armenia. Because Turkey’s economy is much larger than

Armenia’s, when Turkey opens the borders, Armenia’s economy would be affected much more

than Turkey’s. Freinkman, Polyakov and Revenco (2004) from the World Bank did an empirical

study on the economic effects of Turkey lifting the blockade on the economy of Armenia. The

empirical results indicated that in Armenia the positive economic effects of open borders are much

less than the economic benefits, when Armenia improves its infrastructures, institutions and

reduces corruption.

 

An important observation is that the productivity of every manufacturing sector in Armenia is

significantly less than the productivity in Turkey. Armenia could compete with some of the Turkish

products because wages in Armenia are much lower than wages in Turkey. The goal in Armenia

should be to raise the real wages and still be able to compete in the world market. Clearly, in order

to raise wages and improve the standard of living of the population in Armenia, it is essential to

improve productivity in Armenia. Productivity could be improved, for example, by allocating more

funds for education, and health care and by improving the infrastructure of the country such as

telecommunication and by developing legal and financial institutions. Improving productivity

should be the focus of policy makers and analysts because the best method of increasing production

of economic sectors and increasing the standard of living in Armenia is to improve productivity.

 

 

 

References

 

Balassa, Bela, 1986. “Comparative Advantage in Manufactured Goods: A Reappraisal,” The

Review of Economics and Statistics, 68, 315-319.

Dornbusch, Rudiger, Stanley Fischer and Paul A. Samuelson, 1977. “Comparative advantage,

Trade, and Payments in a Ricardian Model with a Continuum of Goods.” American Economic

Review 67. No. 5 (December) pp. 823-39.

Edwards, Sebastian, 1993. “Openness, Trade Liberalization, and Growth in Developing Countires,”

Journal of Economic Literature, Vol 31, No. 3 (September) pp. 1358-93.

Freinkman. Lev, Evgeny Polyakov and Carolina Revenco, 2004. “Armenia’s Trade Performance

and the Effect of Closed Borders: A Cross-Country Perspective,” Armenian Journal of Public

Policy Vol. 1. No. 2.

Sachs, Jeffrey D., 1987. “Trade and Exchange Rate Policies in Growth-Oriented Adjustment

Programs,” in Growth oriented adjustment programs. Eds.: Vittorio Corbo, Morris Goldstein, and

Mohsin Khan. IMF, Washington, DC.

Samuelson, Paul A., 2004. “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream

Economists Supporting Globalization,” The Journal of Economic Perspectives, Vol. 18, No. 3, pp

135-146.

Stiglitz, Joseph, 2006. “Making Globalization Work,” W.W. Norton & Co., New York.

Stiglitz, Joseph and Andrew Charlton, 2005. “Fair Trade for All,” Oxford University Press, New

York.

Taylor, Lance, 1991. “Economic Openness: Problems to the Century’s End,” in Economic

Liberalization: No panacea. Ed.: Tariq Banuri. Oxford U. Press, Clarendon Press, Oxford and New

York.

[garmag]

This is a little bit long, but I strongly encourage everyone to read it!!!

 

 

OPENING ARMENIA’S BORDER: SECTORAL AND

DISTRIBUTIONAL CONSEQUENCES

 

Summary and Conclusion

BY ARA KHANJIAN

 

According to the above conclusions...ECONOMIC factors indicate opening borders with Armenia is detrimental to Armenian Economy!

I guess Turkey's plans of bringing Armenia to her knees via blockades... IS BACKFIRING on them

 

Azeris and Turks are incurring additional costs and delays for the successful, timely exploitation and economical secure transportation of resources to European markets, by by-passing Armenia..... these resources being located on the eastern parts of Armenia and Artsakh.

This situation is due to the insecure conditions prevailing now... that can be endangered in a future probable conflict with Armenia.

 

Unless there are other factors to substentiate the opening of borders as being beneficial to Armenia... the border should stay closed till Turkey recognizes and repairs all the losses Armenians incurred due to Turkish Genocide of Armenians in 1915.