Exports without an alternative: Businesses and experts criticize the gap between Armenia's export strategy and budget requests
YEREVAN, June 3. /ARKA/. The issue of diversifying Armenian exports has become a key topic in Armenia's economic policy in recent years. Amid periodic restrictions on the export of certain Armenian goods to Russia, authorities have declared the need to expand exports and enter new markets, including the European Union.
Discussions of the Armenian Ministry of Economy's 2027 budget proposals have sparked criticism from business representatives and the expert community. The main question concerns the extent to which the planned budget funding aligns with the stated goals of export diversification.
Budget Requests and Export Strategy
The discussion was sparked by a social media post by Modex CEO Haykaz Fanyan.
According to him, approximately 1.6 billion drams have been allocated for export activities under the "Export and Investment Promotion" budget program. Of this, 1 billion drams, Fanyan notes, is actually intended to subsidize customs duties on goods exported to the European Union in 2026, leaving approximately 613 million drams available for new activities.
Fanyan points out that the Strategic Export Promotion Program for 2025–2031, adopted in July 2025, envisaged the allocation of approximately 6.6 billion drams from state and international sources for these purposes in 2027. "This means that public funds, at best, fall short of even 10% of this amount," Fanyan notes.
In his opinion, the situation may indicate either the formal nature of budget planning or that the importance of export diversification has not yet been properly understood within the public administration system.
Fanyan also reported that representatives of the Ministry of Economy had submitted an appeal to the Ministry of Finance for additional funding, but, according to him, their request was refused.
"In this situation, the priority for the new emerging government should be close cooperation with international donors and a budget review: for a country with a small, open economy, exports have no alternative," he emphasized.
He also noted that, according to his information, budget documents continue to reference the Export-Oriented Industrial Policy Strategy, which has effectively been inactive since 2022.
About liability and claims
The criticism struck a chord among members of the business community.
Tigran Jrbashyan, director of management consulting service at Ameria, called the situation alarming.
“Very sad... In the end, someone has to take responsibility. It is difficult to understand how there can be complete impunity for non-compliance with decisions already made,” he wrote.
Movses Dzavaryan, an entrepreneur and one of the investors in the Goght Urban Valley project, assessed the situation more harshly.
According to him, it seems that the state is not concerned about restrictions on export flows to the EAEU countries, in particular to Russia.
Dzavarian offers two possible explanations: either the authorities are confident that access to the EAEU market will remain, or, in his assessment, they do not take into account the possible damage to the Armenian economy.
“Having a couple of years in reserve, having adopted an export diversification strategy (a very good document) and not lifting a finger - sorry, but this is sabotage in the most difficult times of transition from one formation to another,” the entrepreneur thinks.
He names “complete incompetence of decision-makers” and “sabotage” as his conclusions.
The EAEU as a Resource for Diversification
Export Armenia co-founder Emil Stepanyan offered an interesting perspective on the issue. He believes that diversification should not be viewed as an alternative to the EAEU market.
"As paradoxical as it may sound, the EAEU market is essential for diversification. The same is true for the domestic market, as it finances diversification," he notes.
In his opinion, the government had eight years to more actively engage with exporters and encourage them to use profits earned in the EAEU market to develop new markets.
"Sufficient effort was not made. They didn't engage with exporters," the entrepreneur notes.
Government Position
Amid criticism, the government maintains its commitment to expanding its export geography.
Armenian Economy Minister Gevorg Papoyan announced that the ministry has developed programs to support exports to the European Union and the Middle East. According to him, these provisions provide for compensation of transportation costs, customs duties, and, in certain cases, expenses related to intellectual property.
The authorities are also considering additional mechanisms to support Armenian companies entering European markets, including possible subsidies for logistics costs.
According to Papoyan, Armenian agricultural products are competitive in the European market in terms of quality, and the government's goal is to eliminate infrastructural and logistics barriers.
The minister previously stated that Armenia intends to increase agricultural exports to the European Union four- to five-fold by the end of 2026.
Some numbers
According to Armstat data for the first quarter of 2026, Armenia's foreign trade turnover with the EAEU amounted to $1.40 billion, a decline of 15.6%. Armenia's main trading partners in the post-Soviet space are Russia ($1.33 billion, a decline of 17.2%), Belarus ($46.8 million, an increase of 18.8%), and Ukraine ($28.4 million, an increase of 23.2%).
Meanwhile, trade turnover with EU countries for January-March of this year amounted to $763.2 million, an increase of 54.3%. The top three countries are Germany ($136.8 million, an increase of 38.1%), Bulgaria ($113 million, a fourfold increase), and Italy ($97.3 million, an increase of 16.8%).
