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Coronavirus Barely Touches Armenia But Hurts Economic Ties With Iran, China

Foreign Ministers Zohrab Mnatsakanian (right) of Armenia and Wang Yi of China sign a visa-waiver agreement in Yerevan on May 26, 2019.
Foreign Ministers Zohrab Mnatsakanian (right) of Armenia and Wang Yi of China sign a visa-waiver agreement in Yerevan on May 26, 2019.

YEREVAN -- The coronavirus pandemic was a latecomer to the Caucasus, seemingly avoiding the region.

Armenia, Azerbaijan, and Georgia have only registered a total of 39 cases as of March 12.

Georgia was the first to confirm the presence of coronavirus on February 26, and now has 24 cases. It arrived in Azerbaijan two days later, where it has infected 11 people, and Armenia has just four infections.

But the virus's minor presence does not mean Armenia has been immune to the contagion's economic effects. Two of Yerevan's top trade partners, China and Iran, have been among the most affected by the spread of the pandemic.

China, where the coronavirus originated, is Armenia's third-largest trading partner, with more than $950 million in trade turnover last year.

There were high hopes of further growing that relationship this year, following numerous high-level exchanges in both Beijing and Yerevan in 2019.

The timing could hardly have been worse for one initiative: a long-planned visa-free regime for China, which came into force on January 19 but was suspended for at least two months just 12 days later.

No Belt, No Road

The interruption was particularly disruptive to Armenia's hope of getting involved in China's much-ballyhooed Belt and Road Initiative (BRI), according to Mher Sahakian, founder and director of the Yerevan-based China-Eurasia Council for Political and Strategic Research. "China has already invested $90 billion in [BRI] partner countries [around the world], but Armenia has not tapped into this yet," he said.

Sahakian, who used to head ChinaHay -- an organization for the Armenian community in China -- sees the current crisis as another roadblock to underdeveloped Armenia-China relations. "There is very little investment from China in Armenia so far, only $1 million-$2 million," he said. "Armenia has few specialists on China, and China likewise has little understanding...or awareness of Armenia."

Lost growth in China and the negative effects the pandemic has had on the country's economy will also impact Armenia's trade with Beijing. "Hubei [Province, where the coronavirus outbreak started,] is in the center [of China]," Sahakian explained. "It is like the heart and now the heart is not working."

Unlike many countries, Armenia has not yet canceled flights to and from China. Health Minister Arsen Torosian said at a cabinet meeting on March 7 that new coronavirus-related restrictive measures on China would be discussed "within two to three weeks."

Armenian Prime Minister Nikol Pashinian (center) and Chinese Ambassador Tian Erlong (left) pose for a photo with students of the Chinese-Armenian Friendship School in Yerevan in August 2018.
Armenian Prime Minister Nikol Pashinian (center) and Chinese Ambassador Tian Erlong (left) pose for a photo with students of the Chinese-Armenian Friendship School in Yerevan in August 2018.

Some international businesses operating between China and Armenia have also felt the effects of the restrictions. One such firm is King Long, a Chinese bus manufacturer that sells vehicles to Armenia.

"The timing [of the coronavirus outbreak] was not good," said Anahit Agadzhanian, King Long's sales manager for the CIS region. "This is the high season for tour-bus sales, before the tourist season, and many orders have been canceled."

In Armenia's case, King Long managed to ship "most of their products" for the upcoming season before the end of January, she said, when the coronavirus crisis was not as severe.

Yet the virus still caused complications. "We wanted to bring the bosses [from China] to Armenia for a big showroom opening in February, but they couldn't get visas [because of the coronavirus outbreak]," Agadzhanian said.

Crucial Link To World

And another of Armenia's long-standing, visa-free programs also fell victim to the restrictions related to the coronavirus. On March 2, Armenian Prime Minister Nikol Pashinian announced that Armenia's visa-free regime for Iran would be suspended "within four or five days."

No timetable for rescinding the suspension was given and it will likely stay in place, as Iran is among the hardest-hit countries by the coronavirus.

Iran is Armenia's sixth-largest trading partner, with over $400 million in trade turnover last year. More importantly, it is also a crucial link to the outside world, representing one of only two open land borders for the landlocked country: some 80 percent of Armenia's borders -- with Azerbaijan and Turkey -- are sealed due to the long-running conflict over the Nagorno-Karabakh region.

This important link with Tehran likely explains why the Armenian government has been hesitant to fully restrict travel and trade with Iran. The February 23 partial border closure by Yerevan with Iran did not include cargo transport, which Pashinian specified would be able to continue "without restrictions" aside from "special monitoring."

Andranik Grigorian, head of the Central Bank's Financial System Stability and Development Department, said the closed border with Iran had not yet had any impact on Armenia's financial system.

"For the time being we do not see any problems here." Grigorian told RFE/RL's Armenian Service. "Our financial system does not have that level of related assets for the closed border with Iran to lead to problems in it."

No Worries At GUM

Armenia's market sellers have thus far seen a muted effect from the virus.

At the GUM market in southern Yerevan, one of the city's largest, most stall owners said they had not experienced major disruptions in trade.

"Most of our stuff is Armenian, so we don't have many problems," said Eduard, 62, who sells produce. "Some citrus fruits, grapefruit mostly, is [harder to acquire] now, but not much else."

And Baregam, 36, had no fears about the quality of the various spices he sells that come from coronavirus-besieged Iran. "Everything is checked thoroughly at the [Armenia-Iran] border," he said.

The full extent of Armenia's border closure with Iran remains unclear. While Pashinian's comments imply that cross-border movement of people is still possible with a visa, other sources say the land border will be fully closed until March 24.

Views at the market on the seriousness of the coronavirus are mixed.

"Of course, I'm afraid of it," Eduard said. "The whole world has it."

Roubina, a candied-fruit seller, had fewer qualms. "We're Armenian, we'll be fine," she said.

Traders at the GUM market in Yerevan are not very concerned -- so far.
Traders at the GUM market in Yerevan are not very concerned -- so far.

Meanwhile, there are hopes in the Armenian business community that China will handle the crisis quickly.

"I'm confident that this will be resolved [in China] in March or April," Sahakian said.

"Frankly, I'm more worried about Armenia or Iran than [I am about] China," Agadzhanian admitted.

Sympathy For China

The pandemic has even had a silver lining of sorts for Armenia-China relations. ChinaHay released a video on February 10 of Armenians exclaiming "jia you!" ("stay strong!" in Chinese), under the hashtag #ArmeniaWithChina.

Volunteers in Yerevan also collected over 10,000 face masks and sets of gloves to send to China.

Many saw this as repayment for China's aid to Armenia in the past. "China has donated many buses and ambulances to Armenia," Agadzhanian noted, while Sahakian said that "China was the first" source of military aid to Armenia following the 2016 "Four-Day War" with Azerbaijan.

"I see a lot of sympathy for them [from Armenians]," Sahakian said. "We have had our own share of catastrophes, like the [1988 Spitak] earthquake, so people have genuine compassion [for the Chinese]."

Meanwhile, Armenia's Health Ministry continues to institute restrictions on countries in an effort to contain the virus's spread. Health Minister Torosian stated in a March 7 Facebook post that France, Germany, and Spain would be added to those destinations requiring "special control," joining China, Iran, Italy, South Korea, and Japan.

Despite that news and the continued spread of the pandemic around the world, spice seller Baregam is not the least bit panicked.

"I don't give a damn about the coronavirus," he declared.

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