A free economic zone regime expected to come into effect in the territory adjacent to Yerevan’s international airport is expected to spur exports of local agricultural products and have positive effects on the general economics of the area in Zvartnots.

Companies conducting their business operations around the territory of the airport will be exempted from profit tax, customs dues, value-added tax and will only pay income tax.

Hayk Mirzoyan, who heads the Industry Department at the Ministry of Economy, says that the business model for a free economic zone logistic center has been developed with the help of a Dutch specialist. Efforts are currently made to work out a law on free economic zones.

The concept of the establishment of a free economic zone was adopted by the government still in November 2008. In developing the program, the government assumed as the basis the central role of ensuring the country’s food security and developing agriculture that was defined in its own program. Under the concept, the development of agriculture should proceed with the industrialization of agriculture and full engagement of the production-processing-market link, which will make it possible to increase the revenues of rural economies.

According to Mirzoyan, quite a lot of work has been done so far and as a result of the implementation of the program the exports of Armenian agricultural products, according to their estimations, will increase by 20 percent within a year. (Agricultural produce worth $19 million were exported from Armenia in 2009).

“We have high-quality agricultural products, however we have also big problems connected with export, as well as with shortage of infrastructure in rural economies,” said Mirzoyan.

It is planned under the program to set up pilot points for collecting products in rural areas of the republic so that villagers could quickly store their produce, then sell to exporters. Storage and packaging points will be situated in the territory of the airport from where agricultural products will be exported to foreign markets by air. According to Mirzoyan, three such agricultural produce collecting points have already been set up. He said that a large number of companies, even some not local, already wish to engage in export in the free economic zone.

“The villager himself decides who to sell his produce to. Everyone can buy products from a villager and export. It does not mean that our agricultural products will be exported only through the airport. We also have other ways,” said Mirzoyan, giving assurances that there will be competition and export of agricultural produce in the free economic zone will not be monopolized.

Former Central Bank chairman, economic Bagrat Asatryan told ArmeniaNow, however, that he thinks this program will not have any significant impact on the development of agriculture.

“Of course, the program will invigorate the sector a little, but will not have a significant economic effect,” said Asatryan.